The latest in housing trends reveals a substantial build-to-rent boom in the U.S., with more than 110,000 single-family rentals currently under construction across Texas, Arizona, and Florida.
Why the Build-to-Rent Model is Thriving
In recent years, soaring home prices and elevated mortgage rates have pushed many potential buyers into the rental market. The build-to-rent sector offers a compelling alternative for those who are on the fence about purchasing a home. Renting becomes a strategic choice — and in many cases, a more affordable one — especially for individuals and families aiming for flexibility and quality living without the burdens of ownership.
Current State of the Market
As detailed in the latest Point2Homes report, the landscape of single-family rentals is evolving significantly. More than 613 build-to-rent communities are underway, with a projected increase of 53.5% in available rental inventory upon project completion. This uptick corresponds with a growing demand for larger homes tailored for families and those working from home. With occupancy rates in these communities hovering around an impressive 95%, it’s clear there’s a strong appetite for this type of housing.
Where Are We Seeing Growth?
Metro areas like Phoenix, Dallas, and Atlanta are at the forefront of this rental construction surge. Phoenix leads the pack, contributing over 13,000 new single-family rentals, thanks to its strong job market and commitment to sustainability. Additionally, Dallas follows closely, with 8,470 units under development. These locations flourish due to population growth and economic opportunities, making them prime spots for rent-seekers.
Key Players in the Build-to-Rent Movement
The impetus behind this build-to-rent boom is multifaceted. Here are several vital factors:
- Job Market Stability: The influx of employment opportunities, especially in booming metros, drives rental demand. With companies expanding and relocating to these areas, residents find job security in addition to viable rental options.
- Desirable Amenities: Today’s consumers prioritize living in communities that enhance their lifestyle. Build-to-rent communities often come equipped with features like pet parks, swimming pools, and fitness centers, appealing to families seeking more than just a house.
- Pandemic Shift: The pandemic shifted preferences towards larger living spaces outside congested urban centers. As renters flow to suburbs, demand for single-family rentals is at an all-time high, reshaping the housing landscape.
Deep Dive into Metro Trends
Over 15 metropolitan areas across the nation boast over 1,500 single-family rentals currently underway. Besides Phoenix and Dallas, Atlanta is notable, with 6,885 new units being developed across numerous communities. The state’s favorable demographic trends coupled with strong business conditions are solidifying its status as a build-to-rent hotspot. Here’s a closer look at other key players:
- Charlotte: Unveiling plans for several thousand new rentals caters to the quickly rising demand in this emerging market.
- Orlando: With attractions ranging from theme parks to a flowering job market, the demand for spacious living is ever-increasing.
- Raleigh and Huntsville: Both areas benefit from a blend of job growth and lifestyle enhancements, attracting renters looking for a blend of urban and suburban experiences.
Projected Supply Increases
The build-to-rent boom signifies a larger narrative. In states like Texas and Arizona, a collective jump of over 50% in rental supply is projected upon the completion of current developments. Texas is leading with 21,812 units under construction, followed closely by Florida and Arizona, each contributing around 14,000 units. These developments are strategically positioned to meet the surging demand from a population seeking bigger, more affordable living spaces.
What This Means for Renters
For those contemplating the renting landscape, the current market context suggests exciting opportunities. The availability of single-family rentals in well-planned communities presents an excellent alternative for individuals hesitant to commit to homeownership amid high financing rates.
- Quality Living Spaces: New builds are designed with modern Conveniences tailored towards family needs and remote working scenarios.
- Community Integration: Many of these communities foster social connectivity, allowing residents to engage with their neighbors, making them feel more like home than mere rental units.
- Reasonably Priced Options: Renting often costs considerably less than purchasing a starter home; a total monthly expense can be up to $1,000 cheaper. This affordability underlines the appeal of the build-to-rent sector in current economic conditions.
Future Outlook for Build-to-Rent
The durability of the build-to-rent boom hinges on several economic factors, including housing prices and material costs. Even with potential slowdowns on the horizon due to rising material and labor costs, demand remains high, promising growth in the sector. Eventually, renters looking to avoid financial burdens have an encouraging alternative with the growing supply of rental homes. According to reports, transitioning away from urban hubs presents profound opportunities for renters seeking spacious and affordable housing.
The Point2Homes build-to-rent report reveals that the industry is catering increasingly to those yearning for quality yet affordable residences, positioned perfectly within reach. With more projects slated for completion, the rental sector will have ample prospects for renters across various life stages. Whether stepping into family life, relocating for work, or simply embracing a renter-focused lifestyle, the build-to-rent sector is prepared to meet diverse needs efficiently, supporting a healthy rental ecosystem for the foreseeable future.