Housing Stress Drives Surge in US Build-to-Rent Developments
Amidst a stressed U.S. housing market characterized by skyrocketing mortgage rates and stalled inventory, the build-to-rent (BTR) sector is experiencing significant growth. U.S. Census data indicates that nearly 5% of single-family homes started in 2022 are planned as rentals, marking a substantial increase from previous years. The National Association of Home Builders reported a 91% year-over-year rise in single-family BTR starts in the second quarter of 2022. This shift is driven by millions of prospective buyers forced into renting due to affordability issues, pushing occupancy rates for single-family rentals to their highest levels in 25 years, exceeding 94.9%. Major developers like Toll Brothers, D.R. Horton, and Lennar are investing billions into this segment to capitalize on the demand. While BTR currently represents a small fraction of total construction, experts predict continued expansion, with some estimating a 50% growth in BTR developments by 2025. This trend offers a potential, albeit limited, solution to the nationwide deficit of five million single-family homes, transforming market challenges into opportunities for builders and investors.
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Housing Stress Drives Surge in US Build-to-Rent Developments
Amidst a stressed U.S. housing market characterized by skyrocketing mortgage rates and stalled inventory, the build-to-rent (BTR) sector is experiencing significant growth. U.S. Census data indicates that nearly 5% of single-family homes started in 2022 are planned as rentals, marking a substantial increase from previous years. The National Association of Home Builders reported a 91% year-over-year rise in single-family BTR starts in the second quarter of 2022. This shift is driven by millions of prospective buyers forced into renting due to affordability issues, pushing occupancy rates for single-family rentals to their highest levels in 25 years, exceeding 94.9%. Major developers like Toll Brothers, D.R. Horton, and Lennar are investing billions into this segment to capitalize on the demand. While BTR currently represents a small fraction of total construction, experts predict continued expansion, with some estimating a 50% growth in BTR developments by 2025. This trend offers a potential, albeit limited, solution to the nationwide deficit of five million single-family homes, transforming market challenges into opportunities for builders and investors.
FinLedger