SINGLE FAMILY RENTALS PROJECTED TO BE RECORD SHARE OF SINGLE FAMILY HOME STARTS
In keeping with trends from past recessions, the share of single-family rental starts will increase in 2023, as mortgage rates reach multi-decade highs. During most recessions since 1980, the share of single-family starts built for rent has increased relative to other types of single-family residences. Developers delivering into a weak home-buying market will seek alternatives for their product, as purchase demand evaporates. Furthermore, single-family rentals have grown in popularity over the last cycle, rising from 2.6% of all single-family starts in 2009 Q4 to 6.3% today. Single-family rental growth has been driven by heightened interest from institutional investors, particularly in the past few years as their performance excelled.