The pace of single-family build-to-rent construction cooled in the first quarter as tighter financial conditions have caused a pullback of investor interest. According to an NAHB analysis of Census Bureau data, the number of single-family build-to-rent starts in the first quarter was 7% lower than the same period in 2022.
However, strength earlier in 2022 means that over the last four quarters, 69,000 such homes began construction, which is a 17% increase compared to the 59,000 estimated single-family build-to-rent starts in the four-quarter prior to that period.
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 (7.5%) is nonetheless higher than the historical average of 2.7% (1992-2012) and set a data series high after growth in 2022.
Demand by investors for single-family rental units, new and existing, has cooled in recent months as financial conditions have tightened. This will lower the share of homes sold to investors in the quarters ahead.
