The number of single-family homes built-for-rent declined at the start of 2019.
According to data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, there were 5,000 single-family built-for-rent starts for the first quarter of 2019. This is lower than the 6,000 estimated for the start of 2018. Over the last four quarters, 42,000 such homes began construction.
Given the small size of this market segment, the quarter-to-quarter movements are not typically statistically significant. The current four-quarter moving average of market share (4.8%) remains higher than the recent historical average of 2.7% (1992-2012) but is down from the 5.8% reading 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.
With the onset of the Great Recession and declines in the homeownership rate, 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 low in terms of the total size of the building market.
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 2015 American Community Survey. As homes age, they are more likely to be rented. Thus, the primary source of single-family rental homes is not construction but the existing housing stock. In fact, from 2005 to 2015, 56% of the gains in the rental housing stock were due to increases of for-rent single-family homes.