Adobe Stock/Andy Dean Photography

The burgeoning single-family rental business, shut out of much of the housing market by a lack of inventory, is now eyeing new-home stock for the product it needs. Curbed reports:

Single-family rental (SFR) companies such as Invitation Homes and American Homes 4 Rent got their start by buying houses out of foreclosure in bulk after the housing collapse 10 years ago. But with housing inventory shortages breaking out across the country over the last few years, it’s gotten harder for SFR companies to add to their rental stock. To get around this, SFR companies are beginning to buy homes directly from the source—home builders.

SFR companies’ need for new housing inventory has led to their increasingly cozy relationship with home builders, one that‘s also contributing to a rise in “built-to-rent” housing, where a home builder sells a house directly to an entity that intends to rent it.

While the scale of built-to-rent activity is still relatively small and mostly casual, there are already signs that more formal partnerships or mergers between SFR companies and home builders are on the horizon. There are also new companies that build entire single-family subdivisions with the express purpose of renting the units themselves.

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