More than halfway through 2023, the single-family rental (SFR) sector continues to demonstrate why it deserves the attention of multifamily investors.

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.

While macroeconomic headwinds may not recede soon, tenant dependability, the core strength of small multifamily, has proven to be a powerful antidote to financial market storms.

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.

Multifamily rent growth in the U.S. was spread throughout a diverse selection of markets during the second quarter of 2023, a change from the last several quarters when Sun Belt markets dominated the list.