Of the 127.4 million occupied housing units in the U.S., more than 45.6 million are renter-occupied households, according to the latest U.S. Census data. And zooming in on the rental segment, single-family rentals are expanding the fastest, biting increasingly bigger chunks off of a growing market: The number of completed single-family rentals in build-to-rent communities across the country simply exploded, increasing more than tenfold from a meager 3,800 in 2015 to 39,000 new deliveries a decade later.
Although the low vacancy rates and strong construction activity are enough to prove that the single-family build-to-rent (SFR BTR) market is on a roll, other factors are pointing in the same direction, as well, according to a Point2Homes analysis of the most recent Yardi Matrix data: With six in 10 new house renters coming from apartments, the share of renters who opt for the single-family life just reached a five-year high. At the same time, three-bedroom homes are slowly but surely overtaking two-bedroom houses for rent in renters’ preferences, further emphasizing the growing demand for space and comfort.
Key Insights from the March Build-to-Rent Report:
- SFR for the win: Six in 10 new house renters moved into a single-family home from an apartment, showing that space is increasingly more important for renters.
- Compared to 2022, when only three in 10 new house renters left their apartment for a house rental, 2024 recorded an accelerated shift from compact living.
- Space takes center-stage: 3-bedroom houses for rent are gaining popularity, making up the majority (53%) of SFR BTR completions in 2025 so far.
- Average rent of $1,776 versus $2,504 for the average monthly mortgage payment: Renting is a better deal compared to owning. The average rent is hundreds and even thousands of dollars lower than mortgage payments in most Yardi Matrix markets.
- Competitivity softens, renters benefit:
- Deliveries, total inventory and single-family rentals under construction reached all-time highs in 2024.
- Single-family rental occupancy rates fell 0.7% year-over-year, but demand for renting single-family homes is likely to remain robust for demographic and lifestyle reasons.
6 in 10 New House Renters Moved Into a Single-Family Rental From an Apartment
Supported by high-demand from Millennials as well as favorable economic conditions and vigorous job growth in many markets, single-family rentals are increasingly shaping up to be the solution to renters’ housing problems. Young people starting families, as well as professionals of all ages are increasingly let down by the crammed apartment life and the noisy hustle and bustle of busy urban hubs. As such, they’re becoming more and more attracted to the suburbs that promise more space, more privacy and better lifestyle opportunities.
So, lured by the extra indoor and outdoor space; the comfort offered by the up-to-date home features; and the myriad community amenities, many renters are taking the jump, leaving apartment life behind to join the growing communities of house renters.
The accelerated housing demand in suburbs and exurbs is also due to sustained rates of remote work, which never returned to pre-pandemic levels. Around 68% of U.S. employers offered work location flexibility in Q4 2024, according to the Flex Index, leading to increased space requirements needed at home to accommodate work-from-home.
Homeownership affordability is another pain point, and also one of the reasons why renting a single-family home is becoming a stepping stone on the road to homeownership. Rather than moving up the ladder straight to owning their own home, apartment renters are choosing house renting as an intermediate rung. Those who can’t afford homeownership, especially in the most in-demand suburban neighborhoods, move to house rentals instead, which means they don’t have to compromise on space.
However, young renters in search of more space are not the only ones turning to single-family homes: 8% of new house renters were previous homeowners. This could indicate that renting also works best for families and empty-nesters who are relocating for work or to be closer to loved ones.
Above All, Space: 3-Bedroom Houses for Rent Become New Norm
The commitment and maintenance-free nature of the BTR sector is just the cherry on top of the advantages that single-family rentals offer. In light of increasing numbers of renters choosing to ditch the apartment in favor of a single-family home for rent, the increase in three-bedroom deliveries makes perfect sense.
After hovering around 20% to 25% of the total yearly BTR completions, three-bedroom houses for rent overtook all other types of homes in 2021 and have held steady at around 40% ever since. In fact, year-to-date figures place three-bedroom completions at 53% of all deliveries.
Up until 2020, two-bedroom units were enough, because different activities required going to different places and spaces in order to perform them: Work happened at the office; learning happened at school; meeting with friends and loved ones meant choosing from the myriad coffee spots and restaurants available all across the city. There were also parks, gardens, museums, friends’ homes, cinemas, shops and all of the other favorite spots.
But, after 2020, everything moved online: From work and school to shopping and all things entertainment, the computer or TV in the living-room was the place to be. And that got old pretty quickly.
To regain some of the spatial separation that was a given before the pandemic (and which offered renters and people in general some respite from one activity before moving to the next one), renters first started opting for single-family rentals and then leaning toward single-family rentals that are increasingly more spacious. In fact, renter tenure data shows that house renters are spending increasingly more time in three-bedroom houses for rent. In this case, the extra room can become the office, separate from the kitchen or the living-room, where everyone meets just to eat and talk. This means that two-bedroom homes are losing ground and fading away in the rearview mirror as three-bedroom rentals become the norm.
Renting Is a Better Deal Than Owning in Most Markets
The right to property, or the right to own property, is often classified as a human right. That’s why homeownership is such a central part of people’s lives (and the American Dream) and why it’s considered one of the main life milestones. Additionally, owning a home is also associated with a higher quality of life as it offers safety, stability and a way to build wealth in the form of equity.
That said, current economic and social conditions favor renting: As growing home prices and high mortgage rates keep many on the sidelines, renting is emerging as the better solution. What’s more, houses for rent offer more space for a better price.
At $1,776, the average rent for a single-family rental is hundreds of dollars cheaper than the average mortgage payment, which hovers around $2,500. Plus, that might not be the end of renters’ gains: Homeownership comes with significant extra costs aside from the monthly housing payments, such as property taxes, regular home maintenance costs, homeowner’s insurance premiums, and private mortgage insurance.
With a more than $4,000 difference between the monthly mortgage payment and monthly average rent, San Francisco is at the top of the list of metros where house renters are better off than owners. Despite the continued exodus of businesses from the downtown area of San Francisco, the Bay Area behemoth continues to be one of the most in demand business hubs in the nation. Moreover, given that supply is in no hurry to catch up with demand and with San Francisco being one of the metros with no new BTR completions in 2024, prices might remain elevated for the foreseeable future.
San Diego is hot on its heels, with an almost equally impressive difference of $3,146. Although both mortgage payments and rents tend to pack a punch, renters are clearly winning. Rounding out the podium is tech-heavy Seattle, followed quite closely by Los Angeles, metros where the typical single-family renter is paying nearly $3,000 and $2,600 less, respectively, than the average owner, each month.
Then, 10 more markets stand out with monthly price differences greater than $1,000, whereas in 15 other select Yardi markets, the monthly difference between renting and owning stays below $1,000.
For instance, with more than 2,000 single-family rentals under its belt, Chicago has another 1,300 units in various stages of development across the metro, which means that house renters in the Windy City have plenty of options to choose from. However, this is the metro where making a decision between renting and buying could be the most difficult, as the monthly average rent is only $255 cheaper than mortgage payments.
Similarly, Detroit is the only other metro where the difference between buying and renting is less than $300 per month. But, because the metro has the seventh highest total supply of BTR single-family homes (which means house renters are spoiled for choice), buying might still not be appealing enough.
Competitivity Softens, House Renters Benefit
- New completions hit a new high and most markets see significant upgrades in rental stock.
- Occupancy rates fall 0.7% year-over-year, which could indicate that house renters in some markets have improved chances of finding the rental that matches their needs.
According to the most recent Census data, the South remains the fastest-growing U.S. region: “With a population gain of nearly 1.8 million — a change of 1.4% between 2023 and 2024 — the South added more people than all other regions combined, making it both the fastest-growing and largest-gaining region in the country.“
In fact, data shows that “Between 2023 and 2024, […] Arizona, California, Florida, Georgia, New Jersey, New York, North Carolina, Texas and Washington experienced population gains of over 100,000 people. Texas, the second-most populous state, had the largest numeric increase in the country, adding nearly 563,000 people for a total population of 31,290,831 in 2024.“
And BTR development closely follows population growth. According to Yardi Matrix, SFR BTR construction is concentrated in high migration states.
With construction of single-family rentals in build-to-rent communities reaching a new historic high, more house rentals are coming online than ever before. Indeed, the 39,000 houses for rent that were completed in 2024 represent a 15.5% increase compared to the year before, and that’s worlds away from the 6,000 and 7,000 units per year that were coming online in the years before the pandemic.
Occupancy rates have also remained quite high across the nation, with 94.7% of all SFR BTR units currently occupied. Here again, these rates tend to mirror population and employment growth and are highest in areas with an abundance of young professionals and new job opportunities, but also metros where BTR construction is ramping up.
Offering flexibility, privacy and convenience — and sometimes a more affordable option than today’s historically high-priced housing market — SFR BTR is shaping up to become renters’ preferred option. And, while the move toward spacious single-family homes is a trend that gained momentum post-pandemic, it’s expected to continue shaping the market in the years ahead.
Therefore, it’s no wonder then that U.S. SFR occupancy rates remained quite high at just under 95%, despite the slight year-over-year decline of 0.7%. This dip may be a small step, but a step in the right direction nonetheless: The new single-family rentals hitting the market are easing the pressure that many renters might be feeling.
So, where can house renters find a roomy single-family home more easily? Metros like Jacksonville, FL; Charleston, NC; Austin, TX; Dallas; San Antonio; and even Phoenix are at the lower end of the occupancy spectrum, meaning that house renters here might find a rental house more easily than those who are looking in California’s Central Valley, where occupancy rates are above 98%.
Although BTR starts and completions might slow due to increasing land and building costs and rising rates of construction financing, the units currently under construction would help alleviate, to an extent, the supply/demand gap caused mainly by underbuilding.
Even so, demand remains strong and starts — as well as planned and prospective unit numbers — point to a bright future for renters looking to upgrade their living space and make a change from the busy apartment life to the more comfortable life in a build-to-rent community.
Methodology
Point2Homes.com is a real estate listing portal for rental homes across the United States. Part of Yardi Systems, Point2Homes covers housing trends and news through comprehensive studies that draw from internal data, public records, governmental sources and online research.
This study is exclusively based on data related to build-to-rent communities containing at least 50 single-family rental units, located in build-to-rent, professionally managed communities in the markets covered by Yardi Matrix research. This analysis does not include other types of single-family rentals that are not located in build-to-rent communities.
The latest Yardi Matrix data was used throughout the report. Data for some markets may not be available and data for the locations included in the analysis may be subject to change.
Build-to-rent communities are defined by Yardi Matrix as communities where at least 50% of the units fit one of the following criteria: (1) They do not share any walls with other units, or (2) they have shared walls, but do not have neighbors above/below or have a direct-access garage.
For the purposes of this study, we considered as “completed in 2024” only units that received a certificate of occupancy by the end of December 2024. Units under construction either have not yet received an official certificate of occupancy or are currently being built. Under construction data may be incomplete and is subject to change.
Image credit: TippaPatt / Shutterstock.com
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