Single-Family Built for Rent Market Remains Off Recent Market Highs

Single-family starts built-for-rent were effectively unchanged at 4,000 starts for the first quarter of 2014. While the market share of built-for-rent single-family units remains elevated, the share and count of starts appear to be declining off post-Great Recession highs.

According to data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design and NAHB analysis, the market share of single-family homes built-for-rent, as measured on a one-year moving average, stands at 3.3% for the first quarter of 2014. This remains higher than the historical average of 2.8% but is down from the 5.8% registered a year ago.

SF built for rent_May 14

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 20,000 homes started during the last four quarters. It appears the market is returning to historical averages after recent peaks in this form of construction.

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.



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