Year-Over-Year Construction Starts on Single-Family Homes Built for Rent Increase by 50% in Q4 2020

A deeper look into the U.S. Census Bureau’s Quarterly Starts and Completion by Purpose and Design, conducted by the National Association of Home Builders reveals that the number of single family-homes built for rent (SFBFR) construction starts posted a year-over-year increase in Q4 of 2020. The SFBFR market is a way to add single-family inventory amid concerns over housing affordability and down payment requirements in the for-sale market, particularly during a period when people want more space and a single-family structure. Single-family built-for-rent construction does differ with respect to structural characteristics compared to other newly-built single-family homes, particularly with respect to home size. In Q4 of 2020, there were approximately 12,000 SFBFR. This was a 50% increase relative to the Q4 2019 total of 8,000. Over the last four quarters, 44,000 such homes began construction, which is about 13% higher than the 39,000 estimated SFBFR starts for the four prior quarters. The NAHB concludes that as more households seek lower density neighborhoods and single-family residences, but some must do so from the perspective of renting, the SFBFR market will likely expand in the quarters ahead as the economy recovers from the virus crisis.