SFR Construction Captures Record Market Share as Cap Rates Rise

The outlook for the single-family rental (SFR) sector continues to be upbeat even as rent growth cools nationally. Build-to-rent (BTR) communities have been expanding their footholds in neighborhoods across the U.S. These starts hit a new record high as rental demand has risen from would-be home buyers priced out of ownership by high interest rates.

Key Findings:

  • BTR accounts for 6.3% of new single-family construction starts in the past year, a new record high.
  • SFR rent growth on new leases slows sharply as renewal rent pressures maintain their strength.
  • Cap rates have started to rise, jumping to 5.6%.

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