BILL CLARKSON, CCIM Commercial & Investment Specialist

Phoenix No. 2 in U.S. as build-to-rent homes see threefold increase

Phoenix No. 2 in U.S. as build-to-rent homes see threefold increase

  • By: BILL CLARKSON, CCIM
  • Posted: June 02, 2023

 
Article Originally Posted by AZBigMedia on June 6, 2023
 
After years of surging home prices and more renters staying away from a mortgage commitment, the construction of single-family homes built solely for renting is breaking records. And Phoenix is leading the way, ranking No. 2 in U.S. as build-to-rent homes reached a new high with a threefold increase in future units, according to a report from RENTCafe. 
 

Here are 5 interesting facts from our annual Build-to-Rent (BTR) Report which looks at the evolution of “horizontal apartments”:

Fact #1: The completion of a record-breaking 14,541 BTR houses in 2022 marked the highest yearly total to date. That’s a 47% increase since 2021, when less than 10,000 were delivered.

Fact #2: 11 metro areas saw spectacular surges (from 100% to 700%) in the construction of BTR homes in the past 5 years: Charlotte and Atlanta top the list, jumping from a few hundred units to more than 1,300 and 1,800, respectively. At the same time, Detroit doubled its BTR supply from 2,300 to 4,500 houses.

Fact #3: The expansion of the BTR niche is unstoppable, with 45,000 rental homes in the pipeline, triple the number of houses completed in 2022. Phoenix leads the way with nearly 5,500 homes under construction, followed by Dallas (4,400 units) and Houston (2,600 units). Atlanta takes fourth place with around 2,200 houses underway.

Fact #4: It’s no coincidence that the size of BTR homes also got a boost, averaging at 1,361 square feet (around 4 bedrooms) in 2022— up 2.6% compared to the previous year.

Fact #5: So, what led to this historical surge? While single-family rentals have been around for years, the recent need for more elbow room accelerated the pace of construction. The number of completed units peaked each year after 2020, in contrast to the linear progression seen prior, when approximately 6,000 houses were built annually.