Single-family homes built-for-rent rose to approximately 8,000 starts for the second quarter of 2015, compared to about 6,000 in the same period last year, according to data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design and NAHB analysis.
"The share and count of built-for-rent starts are off post-recession highs and will likely approach historical norms as the housing market continues to expand," said Robert Dietz VP for Tax and Market Analysis for NAHB. "However, given the relatively small size of this market, care must be taken when tracing changes in the estimates."
The data and analysis found that the market share of single-family homes built-for-rent, measured on a one-year moving average, rests at 3.8 percent of total single-family starts for the second quarter of 2015. Quarter-to-quarter movements are usually not large due to this market segment being so small.
Dietz noted that the current market share is higher than the historical average of 2.8 percent but is down from the 5.8 percent registered in 2013.
Although market concentration is up, the total number of single-family starts built-for-rent remains fairly low, with only 26,000 homes started during the last four quarters, the report said.
"Of course, the built-for-rent share of single-family homes is considerably smaller than the single-family home portion of the rental housing stock, which is 29 percent according to the 2011 American Community Survey," the analysis said "The reason for this is that as single-family homes age, they often transition to the rental housing stock."
This month, the Federal Housing Finance Agency (FHFA) has announced the adoption of a final rule establishing the housing goals for Fannie Mae and Freddie Mac for both single-family and multifamily housing for the years 2015 through 2017.
"The single-family goals advance the Enterprises’ statutory missions to provide access to credit for creditworthy borrowers and provide liquidity to the U.S. housing market while operating in a safe and sound manner," FHFA Director Melvin L. Watt said. "The multifamily goals will create rental opportunities for those who need affordable housing. Together, these goals establish a solid foundation for affordable and sustainable homeownership and rental opportunities in this country."
The final rule establishes goals for the first time for rental units affordable to low-income families in multi-family properties with five to 50 units. According to the final rule, both GSEs' multifamily low-income goal for each year from 2015 to 2017 is 300,000 units, an increase from the proposed number of 250,000 units for each year for Fannie Mae and the proposed number of 210,000 for 2015, 220,000 for 2016, and 230,ooo for 2017 for Freddie Mac.