Single-family build-for-rent construction (SFBFR) “surged” during the second quarter as overall affordability suffered from higher mortgage interest rates, according to an NAHB analysis of the Census Bureau’s Quarterly Starts and Completions by Purpose and Design. The 21,000 SFBFR starts during the second quarter represented a 91% year-over-year gain compared with 2021.

Over the last four quarters, 69,000 such homes began construction, which is a 60% increase compared to the 43,000 estimated SFBFR starts in the prior four quarters.

The SFBFR market is a means to add inventory amid challenges over housing affordability and downpayment requirements in the for-sale market, particularly during a period when a growing number of people want more space and a single-family structure. Single-family built-for-rent construction differs in terms of structural characteristics compared to other newly-built single-family homes, particularly with respect to home size.

Given the relatively small size of this market segment, the quarter-to-quarter movements typically are not statistically significant. The current four-quarter moving average of market share (6%) is nonetheless higher than the historical average of 2.7% (1992-2012) and sets a data series high as this submarket expands.