Single-family starts built-for-rent were down sharply on a year-over-year basis, falling to only 6,000 starts for the third quarter of 2013 compared to 11,000 a year prior, the highest quarterly tally since 2003. While the market share of built-for-rent single-family units remains elevated, the share appears to be declining off post-Great Recession highs.
According to data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, the market share of single-family homes built-for-rent, as measured on a one-year moving average, stands at 4% for the third quarter of 2013. This remains significantly higher than the historical average of 2.8%, but is down from the 4.9% registered in the second quarter.
With the onset of the Great Recession, the share of built-for-rent homes rose, with a dip in the percentage during the homebuyer tax credit period.
Despite the elevated market concentration, the total number of single-family starts built-for-rent remains fairly low – only 23,000 homes started during the last four quarters.
Of course, the built-for-rent share of single-family homes is considerably smaller than the single-family home portion of the rental housing stock, which is 29% according to the 2011 American Community Survey. The reason for this is that as single-family homes age, they often transition to the rental housing stock.