Single-family built-for-rent (SFBFR, or built-to-rent (BTR)) construction fell back in the second quarter of 2026, as a higher cost of financing, increased multifamily supply and policy concerns over Congressional legislation related to institutional capital froze parts of the development market. Fortunately, changes by the House of Representatives addressed a harmful Senate proposal. The housing legislation, as enacted into law, does not include a prohibition against institutional capital financing BTR housing. Stabilization for BTR housing should be reached in the coming months.
According to NAHB’s analysis of data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, there were approximately 15,000 single-family built-for-rent (SFBFR) starts during the second quarter of 2026. This is down measurably from the second quarter of 2025 (18,000).
Over the last four quarters, 63,000 such homes began construction, which is a 16% decrease compared to the 75,000 estimated BTR starts for the prior four quarter period.
The BTR market is a source of inventory amid challenges regarding housing affordability and down payment 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 structural characteristics compared to other newly-built single-family homes, particularly with respect to home size.
Given the relatively small size of this market segment, the quarter-to-quarter movements typically are not statistically significant. The current four-quarter moving average of market share (just under 7%) is nonetheless higher than the historical average of 2.7% (1992-2012).
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 three to five percent of single-family starts based on industry surveys.
The Census data note an elevated share of single-family homes built as condos (non-fee simple), with this share averaging about 3% over recent quarters. Some, but certainly not all, of these homes will be used for rental purposes. Additionally, it is theoretically possible that some single-family built-for-rent units are being counted in multifamily starts, as a form of “horizontal multifamily,” given that these units are often built on a single plat of land. However, spot checks by NAHB with permitting offices indicate no evidence of this data issue occurring.a
With the onset of the Great Recession and declines in the homeownership rate, the share of built-for-rent homes increased in the years after the recession. While the market share of SFBFR homes is small, it has clearly expanded. Given affordability challenges in the for-sale market, the SFBFR market will likely retain an elevated market share.
This article was originally published by a eyeonhousing.org . Read the Original article here. .
