Flat Growth for Single-Family Built-for-Rent

Single-family built-for-rent construction posted flat growth on a year-over-year basis, as a higher cost of financing crowded out development activity.

According to NAHB’s analysis of data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, there were approximately 19,000 single-family built-for-rent (SFBFR) starts during the first quarter of 2025. This is flat relative to the first quarter of 2024. Over the last four quarters, 84,000 such homes began construction, which is a 4% increase compared to the 81,000 estimated SFBFR starts in the four quarters prior to that period.

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.

Importantly, as measured for this analysis, the estimates noted above include only homes built and held by the builder for rental purposes. The estimates exclude homes that are sold to another party for rental purposes, which NAHB estimates may represent another 3% to 5% of single-family starts based on industry surveys.

Although the market share of SFBFR homes is small, it has expanded. Given affordability challenges in the for-sale market, the SFBFR market will likely retain an elevated market share. However, in the near term, SFBFR construction is likely to slow until the return on new deals improves.

NAHB Chief Economist Dr. Robert Dietz provides more in this Eye on Housing post.