Increase for Single-Family Built-for-Rent Construction

The total number of single-family homes built-for-rent has shown signs of growth over the past year. However, the built-for-rent market is a small portion of the total single-family development, 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, stood at 4.3% of total starts for the first quarter of 2016. 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% reading registered at the start of 2013.

For the last four quarters, single-family built-for-rent starts totaled 32,000 homes. 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.

built for rent 1q16

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 in terms of the total building market. However, after falling during 2013, the market share has shown signs of gains over the past year.

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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1 reply

  1. I have begun to build new rent houses. I did my first last year and have 3 more lots. The design industry has been so low in my area since 2005 that I’ve had to diversify. Rental units are a great investment in my area and I hope to build many more!

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