Single-family homes account for roughly two-thirds of the nation’s housing stock, and the majority are occupied by the families that own them. But a sizable share – 16.6 percent – are rented instead, and recent trends in construction data suggest that these single-family rentals will become an increasingly popular housing option in the years to come. Growth in single-family rentals is driven by a strong demand for single-family homes but a lack of affordable homeownership opportunities. Home prices have nearly doubled over the past decade, and two-thirds of that growth has occurred since the pandemic. Compounding this are high interest rates that further amplify the long-term costs of owning a home. So, for many households that want to live the single-family lifestyle, renting is the only financially viable option.

Single-family rentals are typically operated by a mom-and-pop landlord or a small institutional investor. But the new model that is becoming increasingly common is the “built-for-rent” (BFR) community: a large-scale development of single-family homes that are designed for renter occupancy from the start. BFRs borrow some features of multifamily housing, like professional leasing offices, on-site property management, and community amenities, and are marketed as a middle-ground between renting and homeownership. And according to the Census Bureau’s Survey of Construction, BFR development is booming. In 2023 alone, construction started on 85,000 BFR single-family homes, a three-fold increase over the past decade. This accounted for 9 percent of all single-family starts that year, again an all-time high. Even as top-line home construction has cooled since 2021, built-for-rent construction has continued accelerating.

Source: Apartment List