10 minutes read
  • Demand for single-family homes for rent is exploding: The build-to-rent stock nearly quadrupled compared to three years ago.
  • A new, fast-growing housing sector means more spacious homes, up-to-date amenities and high-end features that are ready to cater to the needs and personalized wants of the modern, post-pandemic renter.
  • Newly built single-family homes for rent already look like a million dollars, but luxury and ultra-luxury houses for rent bring the art of mortgage-free and stress-free living to a whole new level.
  • The luxury tier: No fewer than five of the cities with the highest shares of luxury houses for rent are in California, but the East Coast holds its own, with Boston, MA; Miami, FL; and Arlington, VA also boasting plenty of luxury single-family homes for rent.
  • The ultra-luxury tier: Los Angeles, San Francisco, Irvine, Anaheim, and San Diego remain undefeated, while the great New York City missed the top 10 for the luxury tier, only to make a splash among the cities with the highest shares of ultra-luxury houses for rent.

 

The Build-to-Rent Boom: Houses for Rent Are Taking Off

Interest for houses for rent is increasing and demand for build-to-rent housing—single-family homes constructed specifically for renting—is expanding at breakneck speed. According to a RentCafe analysis of Yardi Matrix data, in 2023, a total of 27,500 houses for rent were completed, representing a 75% year-over-year increase.

 

 

What's more, this trend is gaining momentum: Currently, nearly 45,500 single-family homes for rent are under construction across the country.

Even before the pandemic, new build-to-rent homes were added at an impressive rate. However, in the years following the lockdowns and the chaotic beginnings of the work-from-home era, when people became acutely aware of their need for space and privacy, the numbers of single-family homes for rent nearly doubled with each year that passed.

 

Renters Are Increasingly Drawn to a Housing Option that Offers the Best of Both Worlds

By choosing a single-family home for rent, they get the indoor and outdoor space they need, while remaining mortgage-free, maintenance-free and stress-free.

This really seems like a combination made in heaven, with more and more renters waking up to the advantages of renting a house rather than buying one, especially in the current market. As both interest rates and home prices remain high, renting the American Dream might just become the next best thing.

 

 

According to historical Census data, 10.9 million renters lived in single-family homes in 2001, making up just under 30% of all renters. By 2022, there were 14.3 million single-family renter households, accounting for about 32.5% of all renters. Despite recent decreases, there were still 3.5 million more single-family renters compared to two decades earlier.

What's more, lifestyle renters, or renters by choice are on the rise. Lifestyle renters are a glamorous subgroup of renters, who choose this lifestyle not because they can't afford buying a home, but because renting suits their current needs better.

But they're not the only ones vying for the new, luxury houses for rent that promise more space, better features and amenities and an elevated lifestyle. Whether they are a family or just friends opting to share a more spacious home, many more renters could opt for a house for rent, and the latest income numbers are on their side. 

 

 

In fact, according to an analysis of IPUMS Census data, the number of millionaire renter households more than quadrupled (470% increase) between 2017 and 2022, while renters earning $150,000 or more reached nearly 3.8 million.

Given that this is one of the newest and fastest growing sectors of the housing market, it's no wonder developers are paying extra attention to new trends, space demands and house features requirements.

A New York Times article shows that, although the careful planning of the fast-expanding single-family communities means that, in some cases, the houses are squeezed a bit more closely together, most of these gem-like properties have luxury finishes and highly attractive features and amenities:

"The lawns are manicured. The swimming pools sparkle in the sun. And the homes, all of them turnkey and smelling of fresh paint, are lined up in tidy rows, an army of cookie-cutter porches standing at attention. Houses often have luxury finishes like granite or quartz countertops and stainless steel appliances. And for tenants, the traditional hassles of homeownership are avoided: Common areas are maintained by gardeners and maintenance staff."

 

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Luxury Home Modern Scandi
This spacious, 3-bed, 3-bath residence is only a walk away from the best shops and restaurants in Brentwood. The gourmet kitchen features Calacatta marble countertops and backsplash, Viking appliances, and a custom built bar area with floating glass shelves and a built-in wine fridge. Photo courtesy of The Agency via Point2

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Luxury House for rent nature inside
This 3-bed, 3-bath house for rent is prominently perched in exclusive Baldwin Vista on a cul-de-sac that ends at the residents' entrance of the Kenneth Hahn Park. It offers access to hiking trails, a Japanese Garden, playgrounds, sports courts, and a fish-stocked lake. Photo courtesy of Core Real Estate Group via Point2

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So, What Could Possibly Beat the Experience of a Single-Family Home for Rent? Easy: A Luxury or an Ultra-Luxury Single-Family Home for Rent

While most of the single-family homes for rent newly added to the market have incredible amenities and luxurious finishes, there's luxurious finishes and then there's true luxury houses for rent. The luxury and ultra-luxury houses for rent available in America's 100 largest cities are the spacious, lavish properties that everyone wants.

And the renters who would love to try this upgraded lifestyle can certainly take their pick: In 24 of the 100 largest U.S. cities included in the analysis, between 10% to 74% of all single-family homes for rent available on the market are in the luxury category, offering features and amenities that could take any renter's lifestyle to the next level. Of course, fewer houses for rent fewer display the marks of ultra-luxury.

 

 

All the high-end houses for rent in Irvine, CA are absolutely breath-taking. That's not news to anyone. But this California city might just set a new bar for opulent living: 74% of all the single-family rentals on the market here are luxury houses for rent. And, crossing into ultra-luxury territory, nearly 12% of all the houses for rent offer amenities that need to be seen to be believed.

Los Angeles is hot on its tail, with almost 60% of all the available houses for rent in the city in the luxury category. These two California cities are occupying the first two spots in the luxury category, with more than half of the houses for rent in these cities boasting the luxury tag.

This means that one look at the houses for rent in Irvine and the single-family homes for rent in Los Angeles would be enough to make anyone want to drop everything and move there. The fully-furnished, turnkey properties are the stuff that dreams are made of, with the most modern appliances, airy rooms, and peaceful, relaxing views.

 

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House for rent modern minimalism white
With three spacious bedrooms and four bathrooms, this architectural masterpiece offers a unique living experience, with stunning, unobstructed views of the Pacific Ocean and the Marina. Photo courtesy of Compass via Point2

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House for rent view
With sweeping views spanning from the city skyline to the ocean, this 2-bed, 3-bath home provides a captivating backdrop for luxurious living, in full & complete privacy. Floor-to-ceiling windows flood the space with natural light. Photo courtesy of Douglas Elliman via Point2

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Boston, MA has the third highest share of luxury houses for rent. However, looking at the shares of ultra-luxury houses for rent, two other East Coast hubs steal Boston's thunder: Miami and  NYC have higher shares of opulent houses for rent, meaning that renters who are all about that extravagant lifestyle have plenty of picks in these cities.

Zooming out, there are several states that truly stand out when it comes to luxury houses for rent. Renters in eight of California's largest cities don't have to worry at all about finding the single-family rental with all the dream features and amenities: Aside from Irvine and Los Angeles, San Diego, Anaheim, San Francisco, Chula Vista, San Jose and Santa Ana also offer plenty of luxurious options for their future tenants. And, with shares of luxury rentals above 10%, Oakland and Riverside also managed to secure a spot in the top 20 most glamorous rental markets.

Some Arizona and Texas cities, as well as Florida's coveted Miami also make a splash. Renters looking for luxurious houses for rent in Scottsdale have a great chance to find their dream rental, as the share of luxury single-family homes for rent in the area is above 30%. The same goes for Miami.

However, Texas is a bit of an odd one out here. Although Dallas is in the top 20 urban hubs with the highest shares of luxury houses for rent, the other cities in the state tend to stand out for the opposite reason: Houston, San Antonio and Austin have some of the largest inventories of single-family homes for rent, but renters would be hard pressed to find that many luxury houses for rent here, not to mention ultra-luxury single-family homes for rent.

 

Methodology

Point2, a division of Yardi Systems Inc., covers real estate trends and news. Point2 studies are based on internal data, public records, governmental sources, online research, and other reliable third-party agencies.

  • For this study, we analyzed the inventory of single-family homes for rent in the 100 largest U.S. cities, taking into consideration the cities with at least 50 listings (all 100 cities qualified). The minimum number of listings was set to make sure the two luxury price categories have a statistically significant number of listings.
  • Based on prices, there were two categories of luxury houses for rent we took into consideration:
      1. Tier 1 (Luxury Houses for Rent): Single-family homes for rent with monthly rental rates above $5,000;
      2. Tier 2 (Ultra-Luxury Houses for Rent): Single-family homes for rent with monthly rental rates above $10,000.
  • The study was based on all active single-family homes for rent at the time of the analysis (May 28th, 2024).
  • The types of properties included in the analysis of inventory were: detached single-family homes for rent and attached single-family homes for rent. Manufactured homes for rent, mobile homes for rent, and apartments were excluded.
  • For the final list of active listings in each city, we examined and counted listings from Trulia, Zillow, Redfin, and Realtor. To calculate the share of luxury houses for rent and create the final ranking, we selected and used the source with the highest number of listings available (duplicates were eliminated where encountered).

 

Fair use and redistribution

We encourage and freely grant permission to reuse, host or repost this article. When doing so, we only ask that you kindly attribute the authors by linking to Point2Homes.com or this page, so that your readers can learn more about this project, the research behind it and its methodology.

Andra Hopulele is a Senior Real Estate Writer at Point2Homes. She holds a BA in Language, one in Psychology and an MA in Cultural Studies. With over seven years of experience in the field and a passion for all things real estate, Andra covers the impact of housing issues on our everyday lives, including the latest news on residential development, the dynamics of house rentals, advice for first-time renters and rental market news. She also writes about the financial implications of the new generations entering the housing market, with a focus on renters' perspectives and challenges. Her studies and articles have appeared in publications like The New York Times, Yahoo Finance, Business Insider, MSN, The Real Deal, Huffington Post etc. She can be reached at [email protected].