Homebuilders believe building homes to rent could help respond to housing affordability and down payment challenges in the real estate market, particularly in response to the COVID-19 pandemic.
The single-family built-for-rent market has “received attention as a means to add single-family inventory amid concerns over housing affordability and down payment requirements in the for-sale market, particularly during a period involving elevated unemployment and weak wage growth,” the National Association of Home Builders reports on its Eye on Housing blog.
The SFBFR market saw a small year-over-year increase in the first quarter of 2020, despite a challenging market, the NAHB notes. There were about 8,000 single-family homes built with the intent to rent them out during the first three months of the year. That still represents a small share of the new-home market, but housing analysts note it’s significant because the share has been increasing.
During the Great Recession, the share of built-for-rent homes also increased in response to market conditions.
“A window of opportunity now exists” for the sector, the NAHB notes on its blog. “As some households seek lower density neighborhoods and single-family residences, but must do so from the perspective of renting, the SFBFR market will likely expand in the quarters ahead.
”Source: “Gains Expected for Single-Family Built-for-Rent Construction,” National Association of Home Builders’ Eye on Housing blog (May 21, 2020)
