Interest and activity in the build-to-rent (BTR) sector continue to rise, with completions increasing 47% on a year-over-year basis in 2022, according to an analysis by RentCafe.
The number of BTR houses completed has jumped in each of the past three years, increasing from 6,677 units in 2019 to 7,469 units in 2020, 9,928 units in 2021, and 14,541 units in 2022.
In addition to a record year of completions, the number of units under construction in 2022 sets the stage for a long runway of growth for the BTR sector.
According to RentCafe, approximately 44,700 BTR homes are under construction, with the bulk of future activity located in Phoenix (5,473 units), Dallas (4,350 units), and Houston (2,553 units). Several Southeastern metros, including Atlanta; Charlotte, North Carolina; Tampa, Florida; Jacksonville, Florida; and Nashville, Tennessee, have more than 1,100 BTR units under construction.
Eleven metros saw increases between 100% and 700% in the construction of BTR homes in the past five years, led by Charlotte (+621%) and Atlanta (+380%). Jacksonville; Phoenix; Greenville, South Carolina; Tampa; Austin, Texas; San Antonio; Des Moines, Iowa; and Dallas also have experienced increases in construction by greater than 100% in the same five-year period. In terms of five-year deliveries, Phoenix (6,071 units), Dallas (3,955 units), Detroit (2,229 units), and Houston (1,875 units) have performed the strongest, according to RentCafe.
In 2022, Dallas and Atlanta recorded 10-year highs for BTR completions, while Phoenix also performed strongly. The BTR market also picked up in several popular cities for renters last year, including Charlotte; Charleston, South Carolina; and Austin, with each city recording 10-year highs in units completed. Other metros in the top 10 for completions in 2022 include Greenville; Detroit; Myrtle Beach, South Carolina; and Panama City, Florida.
While many of the top-performing metros are in expected Sun Belt metros, such as Phoenix, Austin, Dallas, and Atlanta, Detroit stands out as an exception. The Michigan metro nearly doubled its single-family rental stock in the last five years, adding more than 2,200 houses to the BTR stock. According to RentCafe, demand for rentals is projected to remain high in the future with several billion-dollar investments planned for Detroit, including multiple downtown buildings worth a total of $1.5 billion located close to the University of Michigan’s future Detroit Center of Innovation.
RentCafe’s analysis focused on data related to BTR communities containing at least 50 rental units. Data for the analysis was provided by Yardi Matrix and included only properties defined as single-family homes for rent located in BTR, professionally managed communities in markets covered by Yardi Matrix.