Build-to-RentApartmentsNational Housing Market OutlookSingle-Family Rental

3 rental classes compete for dollars and tenants.

July 14, 2023

Co-authored by James Mc Keever and Jesse McConnico

Our Rental Communities Analysis and Forecast report, which tracks build-to-rent (BTR), scattered single-family rental homes (SFR), and apartment trends nationwide, illustrates how single-family rents are a pretty stable business, while BTR and apartment rents are more volatile.

Notice how stable SFR rents have been nationally for the last four-plus years while BTR and apartments boomed and cooled:

  • 2020–2021 boom: Professional investors responded to 2021’s household formation surge by raising BTR and apartment rents quickly, while SFR owners, who tend to be long-term owners less in touch with changes in the market, kept raising rents at normal rates. Most of the large SFR owners, who comprise a small minority of SFR, also raised rents quickly.
  • 2022–2023 cooling: The return to normal household formation rates, coupled with a slight decline in occupancy and a lot of BTR and apartment supply getting completed, have created more competitive pressures where rents are growing far less. Apartments and BTR are also more susceptible to new community openings, which can quickly add hundreds of homes to a submarket, making leasing conditions quite competitive.

BTR & Apartments vs. SFR Rent Trends

  • After experiencing surging rent growth well above scattered SFR and apartment rents in 2021 and most of 2022, BTR rents are now growing at a slower pace (1.3% YOY) compared to apartments (3.5%) and single-family rentals (4.7%).
  • BTR and apartment markets with substantial new supply have experienced the most softening. We are seeing BTR rent declines in Houston and Phoenix and apartment rent declines in Atlanta, Las Vegas, and Phoenix, according to our Burns Apartment Rent Index™.

BTR & Apartments vs. SFR Occupancy Trends

The significant number of new units entering the rental community sectors has weighed on both BTR and apartment occupancy trends, which corresponds with the decline in pricing power mentioned above.

  • Apartment occupancy has decelerated to 94%, primarily due to new supply, compared to 97.5% in early 2022.
  • BTR occupancy has been normalizing since March 2022, falling ~120 basis points to 96% in April 2023. However, BTR occupancy is outperforming apartments and scattered SFR, partially attributable to less aggressive rent growth over the past 6–9 months.

Our build-to-rent index reveals cooling BTR rent trends nationwide.

BTR operators are pumping the breaks on rent increases, according to our proprietary Burns Build-to-Rent Index* (BBTRI™), with national rent growth now near 1.3% YOY from a peak of 16% YOY back in late 2021. We expect BTR operators in some submarkets and metros will have to give back some of the astronomical gains realized in 2021 and 2022 as competition increases from incoming supply and market conditions soften due to inflation’s impact on household budgets.

These conclusions vary significantly by location, so please contact one of our consultants for a specific submarket of interest to you.

  • Nationwide, BTR asking rent growth dropped to 1.3% YOY as of April 2023, significantly below the five-year average closer to 7% YOY.
  • Considering the pandemic-related demand surge, we estimate that the longer-term rent growth rate is closer to ~4–5% YOY.

Supply-side pressure grows.

Rental communities’ supply has been catching up with demand. BTR experienced a surge in construction activity, which increased by 30% in 2022. BTR developers acquired 14% of finished residential lots nationwide, including 31% in the Southwest, outbidding home builders in 4Q22, as reported by 46% of surveyed land brokers.

While both BTR and apartment developers are active throughout the nation, many of the under-construction BTR communities tend to cluster around population growth centers such as the Southeast, Texas, and parts of the Southwest. We anticipate a potential pullback in new BTR and apartment starts due to a much more conservative and costly lending environment—and investor caution and uncertainty surrounding cap rates.

Our extensive mapping efforts have resulted in a comprehensive overview of most existing and proposed BTR communities nationwide, providing our clients with valuable insights into areas of opportunity and risk. To date, we have identified 1,177 completed and actively leasing BTR communities, comprising approximately 146,000 rental homes. Furthermore, we have pinpointed 708 coming-soon BTR communities, totaling over 131,000 rental homes. The high number of new units entering the rental community sectors has weighed on both BTR and apartment occupancy trends, which corresponds with the decline in pricing power mentioned above.


  • BTR supply is projected to increase by an impressive 90% over the next few years, reflecting the product’s popularity among renters and the industry’s growth trajectory.
  • Among active BTR communities, the majority (81%) consist of attached units (configured as duplexes, single-level rowhomes, cottage patio homes, and multiplex townhomes). Townhomes hold the largest market share. However, in newer developments that are forthcoming, horizontal apartments are gaining market share.
  • Density patterns are evolving due to the current cost of land. Existing BTR communities exhibit an average of approximately 124 homes per community across 1,177 communities. However, the coming-soon data showcases 708 communities with an average of 185 homes per community. These larger communities reflect the demand among investors, which allows a superior amortization of the cost of community amenities and operating efficiency. Many future communities will be at higher densities to keep costs per door down and help with affordability for renters.

Our analysis of BTR communities equips our clients with valuable insights to make informed decisions and seize opportunities in this dynamic market. Stay ahead of the curve by leveraging our expertise and understanding of BTR development trends and their implications for your business strategy. To learn more about our rental market expertise, visit our Residential For Rent page or contact us

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