Single-Family Built-for-Rent Construction Grows

Single-family homes built-for-rent starts increased to approximately 9,000 for the third quarter of 2015, compared to about 7,000 for the same period of 2014. However, the single-family built-for-rent market is a small portion of the total market, so care must be taken when identifying trends.

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 3.9% of total single-family starts for the third quarter of 2015. Given the small size of the market segment, the quarter-to-quarter movements are typically not statistically significant.

The current market share remains higher than the historical average of 2.8% but is down from the 5.8% registered at the start of 2013.

This class of single-family construction excludes homes that are sold to another party for rental purposes. It only includes homes built and held for rental purposes.

SF built for rent_3q15

With the onset of the Great Recession, the share of built-for-rent homes rose.

Despite the current elevated market concentration, the total number of single-family starts built-for-rent remains fairly low – only 28,000 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 35% according to the 2013 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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