As the shortage of available rentals increases and rents continue to rise across the country, some developers have begun to build SFRs specifically as rentals. As usual, the most important thing to watch is price trends. Stay tuned!
More Single-Family Rentals Being Built
DAILY REAL ESTATE NEWS | WEDNESDAY, NOVEMBER 30, 2016
Over the past year, builders have been taking on more new-construction projects featuring single-family homes that are being built specifically to rent out. This might be opening the door for more investors who want to buy new.
The market share of single-family homes built-for-rent comprised 4.4 percent of total starts in the third quarter, according to the Census Bureau. That’s significantly higher than the historical average of 2.8 percent, according to an analysis by the National Association of Home Builders. Single-family built-for-rent starts have totaled 34,000 homes in the last four quarters.
That said, at less than 5 percent, the built-for-rent market still remains a relatively small portion of total single-family development. Also, the built-for-rent share of single-family homes is considerably smaller than the single-family home portion of the rental housing stock, which is at 35 percent according to the 2013 American Community Survey.
“As homes age, they are more likely to be rented,” notes Robert Dietz, NAHB chief economist and on the trade group’s blog, Eye for Housing. “Thus, the primary source of single-family rental homes is not construction but the existing housing stock.”
Source: “Single-Family Built-for-Rent Construction,” National Association of Home Builders Eye on Housing blog (Nov. 28, 2016)