Single-family built-for-rent (or built-to-rent, BTR) construction fell back in the fourth quarter of 2025, as a higher cost of financing and increased multifamily supply crowded out development.

Housing legislation now under final consideration in Congress would also weaken the sector. The legislation, as approved by the Senate, would require institutionally financed new-construction single-family rental housing to be sold to individual home buyers within seven years. This requirement would decrease investable capital and lower housing supply. A preliminary NAHB estimate indicates the proposed rule places approximately 40,000 units per year at-risk.

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 fourth quarter of 2025. This is down slightly from the fourth quarter of 2024 (16,000 starts).

Over the course of 2025, 68,000 such homes began construction, which is a 19% decrease compared to the 84,000 estimated SFBFR starts in 2024.

The SFBFR 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. However, investor demand for single-family homes, both existing and new, has cooled with higher interest rates.

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 (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 4% 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 (the condo element identifies another difficulty with respect to the 7-year sale requirement of the proposed legislation in Congress).

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. However, in the near term, SFBFR construction is likely to slow given market and policy headwinds.