US Single-Family Built-For-Rent Sector Experiences Strong 2023Q4 Results

The latest US Census Bureau data on Starts and Completions by Purpose and Design, with additional analysis provided by the National Association of Home Builders (NAHB), reveals that single-family built-for-rent (SFBFR) starts totaled 22,000 units in 2023Q4, which is 29% higher than 2022Q4.

According to the NAHB, this represents an acceleration over the last four quarters; 75,000 SFBFR homes began construction, which is an almost 9% increase compared to 69,000 starts in the previous four quarters.

The NAHB says 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. However, investor demand for single-family homes, both existing and new, has cooled with higher interest rates. Nonetheless, builders continue to build smaller projects of built-for-rent homes for their own operation.

Given the relatively small size of this market segment, the quarter-to-quarter movements typically are not statistically significant, the NAHB explained. The current four-quarter moving average of market share (7.9%) is nonetheless higher than the historical average of 2.7% (1992–2012).