Roughly 90,000 build-to-rent (BTR) units are currently under construction across the entire country. This includes properties that are in the lease-up phase and have construction actively ongoing, as per a detailed third-quarter analysis published by RealPage. The significance of this growth cannot be overlooked as it is reshaping the real estate landscape.

Sun Belt: The Leader in BTR Construction

The Sun Belt emerges as the frontrunner in BTR construction, with an astonishing nearly 57,000 units currently in the process of being built. This figure is more than double the 23,115 BTR units that are under construction in the West. The high concentration of BTR units in Texas, Arizona, Florida, Georgia, and North Carolina emphasizes the need for substantial space to construct single-family style homes that come with an array of community amenities. This trend is not only transforming these regions but also setting new benchmarks in the real estate industry.In the Midwest, there are nearly 8,000 BTR units under construction, while the Northeast has about 1,800 units in the same stage. These numbers highlight the diverse regional spread of BTR construction and the varying demands across different parts of the country.

Challenges and Opportunities in the BTR Market

The BTR market is significantly influenced by a challenging home ownership market. Uncertain mortgage rates and tight for-rent and for-sale housing inventory play a crucial role in driving the demand for BTR units. Single-family housing within the BTR category includes fully detached, semi-detached, row houses, duplexes, quadruplexes, and townhouses, all specifically built for rental purposes.For both developers and renters, the BTR space presents a viable option. Barriers to single-family home ownership continue to persist, especially for first-time buyers. In early December, the weekly average 30-year rate was around 6.69%, which is significantly higher than the 10-year average rate of 4.47%. This rate hike, coupled with persistent inflation despite Federal Reserve Board rate cuts and the potential for tariffs under the Trump administration, poses continued challenges for home buyers.However, despite these challenges, the BTR market shows resilience. With a resilient U.S. economy, real gross domestic product (GDP) at an annual rate of 2.8% as of the 3rd quarter of 2024, partnered with a still solid – though slowing – job market and consumer spending, the BTR sector has a long runway. RealPage is tracking 10,000 planned BTR units across the country, indicating the continued growth and potential of this market.