Single-family rent growth is down, while built-to-rent communities—comprising single-family houses and often funded by Wall Street giants—are up. Is there a connection?
Many mom-and-pop real estate investors have long favored single-family homes because they occupy much of America’s real estate landscape and often provide greater financing opportunities and long-term stability. After the housing crash of 2008, investors started to buy single-family houses en masse due to low interest rates and the ease of financing.
In the first quarter of 2021, investor purchases of single-family homes peaked at 28% of all investor sales, according to Harvard University’s Joint Center For Housing Studies. By the end of 2024, the typical asking rents for single-family homes reached $2,174, up more than 40% from pre-pandemic levels, according to an analysis by Fortune based on Zillow data.
“Rent growth has eased, but rents are still too high,” says Orphe Divounguy, a senior economist at Zillow, to Fortune.
Why Rent Increases Are Dropping
This year, rent increases have dropped significantly nationwide. There are a few reasons for this.
An increase in supply
In 2024, developers completed nearly 39,000 units in suburban America, according to Point2Homes, a Yardi company, marking an increase of almost 16% compared to the previous year. The rise in supply helped accommodate the 6 million renter households in the 20 largest U.S. metros and surrounding suburbs, which increased by 231,000 between 2018 and 2023.
Built-to-rent has gone mainstream
The increase in single-family rental housing comes in part from Wall Street’s embrace of built-to-rent housing. Packed with amenities but located in the suburbs with the space and…