While the single-family rental (SFR) sector’s rent growth averages have retreated from record highs, structural tailwinds are keeping price growth positive — both nationally and in major SFR markets. In this research brief, Chandan Economics and Arbor Realty Trust analyze DBRS Morningstar data, which covers the top 20 MSAs by SFR activity, to discover the metropolitan areas where SFR rent growth is the hottest right now.

Fannie Mae recently announced that its Small Loan cap has increased from $6 million to $9 million for all loans committed as of August 22, 2023. Multifamily borrowers and lenders have praised the change to the Fannie Mae Small Loans program, which will encourage greater investment in a rapidly growing sector where demand remains high despite market volatility.

As Baby Boomers reach retirement age, their evolving geographic preferences are strengthening housing markets and local economies in new locations, which feature attractive climates, relative affordability, and ample outdoor activities. With swelling populations of senior citizens, our top five emerging metropolitan areas for retiree relocation are fertile ground for multifamily real estate investment.

More than halfway through 2023, the single-family rental (SFR) sector continues to demonstrate why it deserves the attention of multifamily investors. Arbor’s Single-Family Rental Investment Trends Report, developed in partnership with Chandan Economics, provides an inside look at this high-performing sector where SFR/build-to-rent (BTR) construction starts are breaking records amidst the ongoing challenges of elevated interest rates, tighter underwriting standards, and historically high cap rates.

Through the first half of 2023, market disruptions have had limited impact on the overall performance of the small multifamily subsector even as prices fell and cap rates climbed. Arbor’s Small Multifamily Investment Trends Report Q3 2023, developed in partnership with Chandan Economics, delivers data-driven analysis on the subsector’s structural health, shaping its positive outlook.

After the historic rental housing bull run of the 2010s and the early 2020s, the open question is: can it maintain this momentum over the next cycle? While the answer is highly debatable, trends in demographics, preferences, and market conditions show the presence of significant tailwinds that will continue to propel investment prospects forward. Chandan Economics, Arbor’s research partner, analyzed historical data from the U.S. Census Bureau to project how Generation Z could impact the future of the rental housing market.