The Single-Family Rentals in Build-to-Rent Communities report by Yardi Matrix shares an update of the SFR market in 2024. Overall, single-family rentals are continuing to grow in built-to-rent communities. Both rent and occupancy growth have been strong in recent months while remaining a financially viable option for renters.
Over two-thirds of the top 30 metros have higher occupancy rates from single-family rentals in BTR communities than other multifamily assets.
4 Biggest Demand Drivers for Single-Family Rentals
But aside from price, what’s driving the demand? Four of the biggest demand drivers for single-family rentals are work-from-home professionals, household growth, the declining affordability of homeownership, and the demographics of Millennials and blue-collar workers.
1. Renters working from home
Because more than half (52%) of full-time workers are now returning back to the office, hybrid work is becoming the norm. Single-family rentals are more accommodating to this shifting demographic than traditional apartments; SFR offers a quieter environment and more space inside the home for the hybrid worker.
2. Household formation growth during the pandemic
Demand is also driven by household formation growth during the pandemic as a result of:
- Employment/wage growth.
- Stimulus payments.
- Increased savings.
3. Declining homebuying affordability
According to the Yardi Matrix report, 61% of renters in the largest metros are priced out of homebuying. The average home mortgage payment reached $2,547 at the end of 2023. Compare this to the average rent of $1,734 and renting looks like the better deal.
As the affordability of buying a home decreases, single-family rentals are prime for Millennials and blue-collar workers who would like to buy a house, but can’t.
4. Specific demographics
Those averaging a salary of $60,000 to $70,000 a year, individuals aged 24 to 40, and Millennials/blue-collar workers are largely driving the demand for single-family rentals in built-to-rent communities.
SFR development trends indicate that flexible designs and lot size by location are based on consumer preferences. For example, young singles and couples prefer pet-friendly units, while young families prefer large common areas.
RELATED: Multifamily rent remains flat at $1,710 in January
Development Trends
The four biggest single-family rental development trends as of 2024 include:
- Amenities. On-site maintenance and community areas are the most popular. Better parking, storage, privacy, and yard space is also highly desired.
- Smart home technology. This has become a “must” and will likely be standard soon, according to Yardi. Developers should plan for future demand such as electric vehicle charging in garages.
- Homes designed for frequent moving. Single-family rentals are using resilient materials like laminate faux wood flooring to maintain a durable, sleek look. Units are designed with wider hallways to accommodate the moving of furniture in and out of the home.
- Flexibility. Target demographics and location influence the design of build-to-rent communities. While younger renters would prefer pet-friendly units and large common areas, older singles and couples prefer an attached garage.
Click here to view the full Yardi Matrix Single-Family Rentals in Build-to-Rent Communities report.
Related Stories
| Jan 24, 2014
Urban Land Institute, Enterprise outline issues in rental housing shortage: Report
Bending the Cost Curve: Solutions to Expand the Supply of Affordable Rentals outlines factors that impede the development of affordable rental housing – causing the supply in many markets to fall far short of the demand.
| Jan 22, 2014
SOM-designed University Center uses 'sky quads,' stacked staircases to promote chance encounters
The New School's vertical campus in Manhattan houses multiple functions, including labs, design studios, a library, and student residences, in a 16-story building.
| Jan 13, 2014
Custom exterior fabricator A. Zahner unveils free façade design software for architects
The web-based tool uses the company's factory floor like "a massive rapid prototype machine,” allowing designers to manipulate designs on the fly based on cost and other factors, according to CEO/President Bill Zahner.
| Jan 8, 2014
Strengthened sprinkler rules could aid push for mid-rise wood structures in Canada
Strengthened sprinkler regulations proposed for the 2015 National Building Code of Canada (NBCC) could help a movement to allow midrise wood structures.
Smart Buildings | Jan 7, 2014
9 mega redevelopments poised to transform the urban landscape
Slowed by the recession—and often by protracted negotiations—some big redevelopment plans are now moving ahead. Here’s a sampling of nine major mixed-use projects throughout the country.
| Jan 3, 2014
World’s tallest vegetated façade to sprout in Sri Lanka [slideshow]
Set to open in late 2015, the 46-story Clearpoint Residences condo tower will feature planted terraces circling the entire structure.
| Dec 31, 2013
BD+C's top 10 stories of 2013
The world's tallest twisting tower and the rise of augmented reality technology in construction were among the 10 most popular articles posted on Building Design+Construction's website, BDCnetwork.com.
| Dec 27, 2013
$1 billion 'city within a city' development approved by Coachella, Calif., city council
The mega development includes 7,800 homes, a retail center, office space, and nearly 350 acres of open space.
| Dec 23, 2013
MBI commends start of module setting at B2, world's tallest modular building
The first modules have been set at B2 residential tower at Atlantic Yards in New York, set to become the tallest modular building in the world.
| Dec 20, 2013
Can energy hogs still be considered efficient buildings? Yes, say engineers at Buro Happold
A new tool from the engineering firm Buro Happold takes into account both energy and economic performance of buildings for a true measure of efficiency.
