SINGLE FAMILY BUILT FOR RENT MARKET SHARE RISES
At the start of 2013, single-family starts built-for-rent were up on a year-over-year basis, with the market share rising to a new high.
Despite some recent ups and downs, the share of single-family homes built for rental purposes continues to rise. But by and large, the construction market for these homes remains a niche market, even as rental demand increased in past years.
According to data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, the market share of single-family homes built-for-rent, as measured on a one-year moving average, stands at 5.8% for the first quarter of 2013. This is significantly higher than the historical average of 2.77%.
With the onset of the Great Recession, the share of built-for-rent homes rose, with a dip in the share during the homebuyer tax credit period.
Despite the elevated market share, the total number of single-family starts built for rental purposes remains fairly low – only 33,000 homes started during the last four quarters, but this total has been increasing with the overall growth for housing starts.
Of course, the built-for-rent share of single-family homes is considerably smaller than the single-family home portion of the rental housing stock, which is 27% according to the 2010 American Community Survey. The reason for this is that as single-family homes age, they are more likely to transition from the owner-occupied to the rental housing stock.
Source: National Association of Home Builders