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Guardian Asset Management
Single Family Rental
Newsletter
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From Our
SFR Operations Team
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Joshua L. Beam
SFR National Director of Operations
jbeam@guardianassetmgt.com
314-281-3439
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William Lynam
Director of Property Management
wlynam@guardianassetmgt.com
267-201-3616
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Single-family Homes for Rent
Reach Historic High in 2023
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After a 75% year-over-year increase, a total of 27,500 homes for rent were completed in 2023. And it doesn’t seem like it’s going to stop any time soon: According to a recent RentCafe study based on Yardi Matrix data, around 45,400 build-to-rent houses are currently under construction, with developers in a hurry to meet increasing demand in a sector that took off in the years following the pandemic.
In 2023, completed single-family homes for rent almost tripled compared to 2021. Up until the pandemic, the number of houses for rent hovered around 4,000 and then 6,000, but by 2023 it had increased exponentially.
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Is Renting the Future of Single-Family Homes? | |
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All over the country, developers are putting up neighborhoods of single-family homes that are never intended to be owned by the people who live in them.
In 2023, homebuilders finished 27,495 single-family homes in developments of at least 50 houses, up from around 6,500 each year before the pandemic, according to data from Yardi Matrix, a commercial real estate data firm.
While that data is incomplete—it doesn’t capture individual houses or small built-to-rent developments—and is relatively small compared to the 1.4 million homes completed that year, according to the Census Bureau, it does illustrate a trend. As high mortgage rates and low inventories make buying a house far more difficult than it used to be, more people are looking to rent the kind of detached, single-family home they might have bought in a friendlier real estate market.
About 7.3% of all newly constructed homes went directly to the rental market between the second quarter of 2022 and the first quarter of 2023, the Urban Institute think tank estimated in a June 2023 analysis.
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Single-family rental construction surges,
propelled by housing squeeze
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Some 93,000 homes built as single-family rentals were completed last year, according to the Wall Street Journal, citing estimates from housing consulting firm John Burns Research and Consulting. That represents a 39 percent increase from the previous year and a record for the sector, according to John Burns.
This year will be another big one, the firm predicts, before construction starts to taper off in 2025. Approximately 99,000 rental homes are under construction this year, despite tighter lending conditions.
“This isn’t going away,” developer Richard Ross told the Journal.
Rent growth is not nearly as fast as it was at the start of the pandemic, but house rents still trend above apartment rents. Occupancy in single-family rentals has held up better than in multifamily buildings.
Just as importantly for the single-family rental sector, the cost of homeownership has outpaced the expense of renting. In March, the average monthly mortgage payment was 38 percent more than the average monthly apartment rent, according to CBRE.
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Thinking of Investing in a Rental Property? Why This Retirement Passive Income Stream May Be More Work Than You Bargained For. | |
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You'll often hear that it's really important to save well for retirement and line up income outside of Social Security. In fact, a good bet is to set yourself up with at least one passive income stream that pays you on a consistent basis.
You may be inclined to invest in a rental property as part of your retirement income strategy. But while a rental property could prove to be a steady source of income, it may not exactly be passive in the classic sense of the word.
It's easy to see why the idea of a rental property investment holds appeal. People will always need a place to live, so if you buy a rental property, you can not only generate monthly income, but also, in many cases, hold onto an asset whose value might appreciate over time and profit in the event of an eventual sale.
The problem with owning a rental property, though, is that it may end up being a lot more work than expected. Of course, the amount of work a rental property entails hinges on what sort of property it is and its condition. It may be less work, in theory, to rent out a single family home and manage one tenant than to rent out a multi-unit property.
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Built-to-rent construction gains momentum amid affordable housing shortage
A record 93,000 single-family rental homes were finished in 2023,
up 39% from the previous year
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Housing affordability has plummeted to its lowest level since the 1980s, keeping many Americans in the rental market. As a result, some homebuilders have doubled down on the construction of built-to-rent (BTR) homes.
In 2023, a record 93,000 new single-family homes for rent were completed, up 39% from 2022, according to a report by The Wall Street Journal. The momentum is continuing as another 99,000 BTR homes are under construction in 2024, although the breakneck pace is expected to ease in 2025.
New rental homes are especially popular in the outer suburbs of cities in Arizona, Texas and Florida, as well as in other areas that are experiencing rapid population and job growth, the Journal reported.
Rent growth for single-family homes, although slowing from pandemic-era double-digit peaks, continues to outpace apartment rents, according to John Burns Research and Consulting. Occupancy rates remain more resilient in single-family homes compared to apartment buildings, indicating sustained demand.
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10 Best States to Buy a House in 2024 | | |
The American Dream often includes owning a home, and as we venture into 2024, many are on the lookout for the best states to plant their roots. With a myriad of factors to consider, from cost of living to safety, job opportunities to educational standards, the search for the ideal state for buying a house can be daunting. However, recent analyses have shed light on some top contenders that prospective homeowners might want to consider. These are the ten best states to buy a house in the U.S. | |
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