You’re witnessing America’s housing revolution as developers completed a record 39,000 build-to-rent homes in 2024, capturing 9% of the market compared to just 5% in 2021. With over 100,000 new units under development nationwide, this sector addresses rising home prices and mortgage rates that’ve made homeownership unaffordable for millions. These purpose-built rental communities, ranging from $1,500 to $3,500 monthly, offer single-family living without ownership burdens, particularly attracting millennials seeking space and privacy while the underlying market dynamics continue reshaping residential environments.
As homeownership becomes increasingly unaffordable across the United States, a new housing sector is experiencing unprecedented growth. Build-to-rent communities are transforming how Americans approach housing, offering single-family homes designed specifically for rental markets.
The numbers tell a compelling story of rapid expansion. Developers completed a record 39,000 single-family rental homes in 2024, representing a 15% increase over 2023. Currently, over 100,000 new build-to-rent units are under development nationwide, signaling continued momentum in this emerging sector.
The build-to-rent sector achieved record-breaking growth with 39,000 completions and over 100,000 units currently under development nationwide.
Market share data reveals the sector’s notable trajectory. Build-to-rent single-family homes captured 9% of the market in 2024, up from just 5% in 2021. Industry projections indicate a 53.5% increase in BTR housing supply based on current construction pipelines, with states like Nebraska and Rhode Island expected to nearly double their inventories.
Several economic factors are driving this boom. Rising home prices and mortgage rates have reduced affordability for many prospective buyers, while low housing supply pushes demand toward rental alternatives. Millennials increasingly prefer the space and privacy of single-family rentals as stepping stones to eventual homeownership. In Atlanta, the median home price reached $412,000, requiring an annual income over $109,000 to purchase.
Build-to-rent properties offer unique characteristics that distinguish them from traditional rentals. These freestanding homes are purpose-built for rental markets and operated like apartment complexes with centralized maintenance and leasing services. Monthly rents typically range between $1,500 to $3,500, depending on location and features.
Geographic concentration patterns show clear regional preferences. The U.S. Southwest leads BTR development due to land availability and economic growth. Phoenix ranks first among metro areas with nearly 17,000 BTR units as of 2024, representing a 300% increase since 2019. Southern cities continue to dominate the BTR market with states like Texas, Florida, and Georgia benefiting from job growth and friendly zoning regulations.
Major institutional investors are fueling this expansion. Companies like Progress Residential and Invitation Homes are deploying considerable capital into new BTR construction, attracted by consistent demand and scalable management models. Higher volume construction creates economies of scale and enables professionalized property management.
The sector faces ongoing policy considerations. Policymakers continue scrutinizing where and how BTR neighborhoods develop, while zoning laws and local regulations may affect construction pace and distribution. These regulatory factors will likely influence the sector’s future growth trajectory.
Frequently Asked Questions
What Are the Typical Rental Rates for Build-To-Rent Properties Compared to Traditional Rentals?
You’ll typically pay higher rental rates for build-to-rent properties compared to traditional rentals.
BTR homes command premium pricing due to their modern design, quality finishes, and attractive amenities that appeal to higher-paying tenants.
These newly constructed properties offer superior features and reduced maintenance issues, justifying the increased costs.
However, you’ll find traditional rentals more affordable if you’re budget-conscious, though they may lack the modern conveniences and stability that BTR properties provide.
How Do Build-To-Rent Communities Handle Maintenance and Property Management Services?
Build-to-rent communities typically partner with professional property management firms to handle maintenance and tenant services.
You’ll find that 68% of BTR developments prefer this professional management approach over self-management.
These communities often maintain dedicated on-site maintenance teams for quick response times.
You can expect 24/7 maintenance services, preventative maintenance schedules, and digital platforms that streamline communication between tenants and staff for efficient service delivery.
What Financing Options Are Available for Developers Entering the Build-To-Rent Market?
You’ll find multiple financing paths when entering build-to-rent development.
Institutional lenders offer specialized BTR products with competitive terms, particularly for rental-focused schemes in regeneration areas.
Private equity joint ventures provide capital while sharing risks and expertise.
Development finance includes bridging loans and structured solutions for different project stages.
Alternative options feature sale-leaseback structures, technology-enabled platforms, and forward funding agreements with institutional investors seeking future rental income streams.
Are Build-To-Rent Properties Eligible for First-Time Homebuyer Assistance Programs?
You can’t use first-time homebuyer assistance programs for build-to-rent properties.
These programs specifically target traditional homeownership where you’ll occupy the property as your principal residence.
Build-to-rent developments are designed for rental income, not personal occupancy, which disqualifies them from most assistance programs.
You’ll need to explore commercial financing options or investor loans instead.
Some programs like WVHDF’s Movin’ Up Loan don’t require first-time buyer status but still exclude rental properties.
How Long Are Standard Lease Terms in Build-To-Rent Developments?
You’ll typically find lease terms in build-to-rent developments ranging from 10 to 20 years or longer.
These extended terms exceed traditional commercial lease lengths considerably.
Developers need longer commitments to recover their substantial construction investments and secure stable returns.
You’ll benefit from predictable rental costs and housing stability with these arrangements.
The extended terms also give you negotiation leverage for rent adjustments or property improvements during lease discussions.
