Approximately 20,000 single-family build-to-rent (SFB2R) starts were reported during the second quarter of 2023, and while that share is more than 4% lower than the second quarter of 2022, the current four-quarter moving average of market share (7.7%) is higher than the historical average of 2.7%, according to the National Association of Home Builders' Eye on Housing. Over the last four quarters, 68,000 SFB2R homes began construction, a slight drop from Q2 2022, which saw a data series high of 69,000 starts.
The market segment is still relatively small, but it has remained resilient against interest rate hikes. Despite ongoing affordability challenges in the for-sale market, the SFB2R market is expected to retain an elevated market share as the sector cools.
The SFBFR market is a source of inventory amid challenges over housing affordability and downpayment requirements in the for-sale market, particularly during a period when a growing number of people want more space and a single-family structure. Single-family built-for-rent construction differs in terms of structural characteristics compared to other newly-built single-family homes, particularly with respect to home size.