Single-Family Rental Investment Snapshot — September 2023
While single-family rental (SFR) acquisitions decreased in the first half of 2023, buying activity in this sector has been less negatively impacted than owner-occupant purchases. The current slowdown, which has extended to institutional investors, reflects a need for increased property yields among buyers and a lack of distress in the market to motivate sellers.
SFR construction continues to be a bright spot. With mortgage costs soaring and underwriting standards for first-time home buyers near their tightest levels since the 2008 financial crisis, priced-out would-be homeowners are now choosing to live in build-to-rent (BTR) communities. As demand for SFR units has grown, the market share of new BTR construction reached record highs last year and could continue setting new milestones throughout 2023.
While financial market conditions will present ongoing challenges, SFR is uniquely positioned to benefit from a likely increase in demand for high-quality rental housing from those priced-out of homeownership. Over the long term, demographic and structural market trends will likely strengthen SFR’s tailwinds, advancing its standing within the housing market.
Access key highlights in our latest Single-Family Rental Investment Trends Report.