The Single-Family Built-for-Rent Sector Continues to Expand as Housing Affordability Declines

According to the U.S. Census Bureau’s Quarterly Starts and Completion by Purpose and Design report for Q1 of 2022, with additional analysis provided by the National Association of Home Builders (NAHB), the single-family built-for-rent sector (SFBFR) continues to expand as housing affordability hurdles continue to increase.

The NAHB points out that 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.

In Q1 of 2022, there were approximately 13,000 SFBFR starts. This is a year-over-year gain of 62.5% (Q1 2021 – Q1 2022). Over the last four quarters, the Census Bureau reported 57,000 SFBFR homes began construction. This is a 32.6% gain compared to the 43,000 SFBFR starts in prior four quarters.

Given the relatively small size of this market segment, the quarter-to-quarter movements typically are not statistically significant. The current four-quarter moving average of market share (5.1%) is higher than the historical average of 2.7% (1992-2012) and near a three-year high.