The Booming Build-to-Rent Market: 2024 Overview
The build-to-rent (BTR) industry has reached unprecedented heights in 2024, with a remarkable surge in single-family rental (SFR) units. According to a recent report by Point2 Homes, the completion of 39,000 rental homes last year marked a significant 15.5% increase compared to the previous year, a stark contrast to the annual completions of 6,000 to 7,000 units before the pandemic.
Growth Trends in Build-to-Rent Sector
The SFR market is seeing expansive growth as homeowners seek alternatives to traditional ownership. The appeal of single-family rentals lies in their combination of space, comfort, and flexibility, making them an ideal choice for various demographics:
- Young Families: Many millennials are moving from apartments to rental homes as they start families but face barriers in homeownership.
- High-Income Renters: Individuals earning high salaries often prefer rental flexibility without the burdens of maintenance.
- Remote Workers: The rise of remote work has increased demand for more spacious living environments.
- Older Adults: Retirees desire low-maintenance living while maintaining space and financial flexibility.
The steady growth in the BTR sector is underscored by escalating demand, with single-family homes now accounting for nearly 10% of all home builds, up from approximately 3% just a few years ago.
Top 10 States Leading in Build-to-Rent Completions in 2024
| Rank | State | Build-to-Rent Units Completed | Record |
|---|---|---|---|
| 1 | Texas | 6,994 | 5-Year High |
| 2 | Florida | 5,379 | 5-Year High |
| 3 | Arizona | 4,812 | 5-Year High |
| 4 | Georgia | 4,095 | 5-Year High |
| 5 | North Carolina | 2,826 | 5-Year High |
| 6 | California | 1,848 | 5-Year High |
| 7 | Ohio | 1,819 | 5-Year High |
| 8 | South Carolina | 1,770 | – |
| 9 | Alabama | 1,534 | 5-Year High |
| 10 | Utah | 1,305 | 5-Year High |
Source: Yardi Matrix as of March 2024
Factors Driving Growth in the Build-to-Rent Market
Several elements contribute to the ongoing expansion of the BTR sector, including:
- High Home Prices: Many potential homeowners across all age groups are priced out of the market.
- Increased Demand for Space: The growing trend of remote work has fueled the need for larger homes with ample amenities.
- Moore Stable Job Markets: Economic growth in regions like Texas and Florida has resulted in greater job opportunities, attracting more renters.
Regional Differences Influencing Build-to-Rent Markets
While the Southern U.S. remains the epicenter of the BTR movement, developments are increasingly spreading to states like Georgia, North and South Carolina, and Florida. Key regions like California are also witnessing significant growth, with 1,800 new rental units completed in 2024 and an additional 2,270 on the way.
- Texas and Arizona: These states continue to dominate, with Texas alone accounting for nearly 7,000 completed units.
- Florida: Completed 5,379 units, with 7,792 more currently under construction, showcasing a robust rental market.
Emerging Metro Areas in the Build-to-Rent Landscape
As metro areas become increasingly vital for BTR developments, some cities have seen robust completion rates:
| Rank | Metro | Build-to-Rent Units Completed | Record |
|---|---|---|---|
| 1 | Phoenix | 4,460 | 5-Year High |
| 2 | Dallas | 3,197 | 3-Year High |
| 3 | Atlanta | 3,035 | 5-Year High |
| 4 | Houston | 2,505 | 5-Year High |
| 5 | Charlotte, NC | 1,415 | 5-Year High |
| 6 | Jacksonville, FL | 1,201 | 5-Year High |
| 7 | Huntsville, AL | 1,098 | 5-Year High |
| 8 | Columbus, OH | 1,018 | 5-Year High |
| 9 | Tampa, FL | 1,005 | 5-Year High |
| 10 | Minneapolis | 926 | 5-Year High |
Source: Yardi Matrix as of March 2024
What’s Next for the Build-to-Rent Market?
The demand for single-family rentals is expected to grow as the paradigm of living and working continues to shift. Current trends indicate that the need for spacious homes with modern amenities is more pressing than ever.
Construction Opportunities: Key Markets
- Houston & Dallas, TX: Both cities are witnessing significant population growth and are expanding in their BTR segments.
- Emerging Competitors: Areas like Charlotte, Jacksonville, Huntsville, Columbus, and Tampa are also rising, with substantial increases in new rental homes.
Conclusion
The build-to-rent market is on a steep upward trajectory, driven by demographic shifts, economic factors, and changing living preferences. With over 217,161 single-family rental units projected to be completed in the coming years, the BTR sector is set to play a critical role in housing solutions across the United States.
For further insights on housing trends, check out Point2 Homes, your go-to resource for real estate data and analysis.