Single-family starts built-for-rent were effectively unchanged at 4,000 starts for the first quarter of 2014. While the market share of built-for-rent single-family units remains elevated, the share and count of starts appear to be declining off post-Great Recession highs.
According to data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design and NAHB analysis, the market share of single-family homes built-for-rent, as measured on a one-year moving average, stands at 3.3 percent for the first quarter of 2014. This remains higher than the historical average of 2.8 percent but is down from the 5.8 percent registered a year ago.
With the onset of the Great Recession, the share of built-for-rent homes rose, with a dip in the percentage during the homebuyer tax credit period.
Despite the elevated market concentration, the total number of single-family starts built-for-rent remains fairly low – only 20,000 homes started during the last four quarters. It appears the market is returning to historical averages after recent peaks in this form of construction.
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 29 percent according to the 2011 American Community Survey. The reason for this is that as single-family homes age, they often transition to the rental housing stock.
View this original blog post on NAHB’s blog, Eye on Housing.