Single-Family Built-For-Rent Construction Starts Hits Quarterly Volume Record in Q3 2021

Further analysis of the U.S. Census Bureau’s Quarterly Starts and Completions by Purpose and Design, provided by the National Association of Home Builders (NAHB), reveals that the number of single-family built-for-rent (SFBFR) construction starts reached its highest quarterly volume on record in Q3 2021.

The SFBFR market is a way to add inventory amid concerns over housing affordability and down payment 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.

During Q3 2021, there were approximately 16,000 single-family built-for-rent starts. Over the last four quarters, 47,000 such homes began construction, which is a 17.5% gain compared to the 40,000 estimated SFBFR starts for the four prior quarters.

The NAHB analysis notes that since the onset of the Great Recession and declines in the homeownership rate, the share of built-for-rent homes increased in the years after the recession. While the market share of SFBFR homes is small, it has been trending higher. As more households seek lower density neighborhoods and single-family residences, a growing number will do so from the perspective of renting. Thus, the NAHB analysis concludes that the SFBFR market will likely expand in the quarters ahead.