First-time homebuyers are struggling to find and afford available starter homes in a high-cost, fast-paced housing market, and rather than waiting for affordability to improve, many are leasing homes in rental-only developments, The Washington Post reports. By the end of the year, builders expect to add 105,000 new homes to build-to-rent developments nationwide, and by 2050, total supply could rise by another 50%.
As decades-high mortgage rates make home purchases unattainable for a growing number of Americans, rental demand is on the rise, especially among younger generations without an equity cushion. While helpful in the short term, experts worry that build-to-rent communities are actually pushing homeownership further out of reach by making it harder for would-be buyers to save for a down payment.
But critics, including local housing economists, say build-to-rent arrangements are exacerbating long-simmering inequalities by replacing entry-level homes with rentals that make homeownership even more elusive.
Buying a home has long been one of the most direct and reliable paths to building wealth. But when renters face constantly rising rents, it becomes much harder to save for a down payment to buy a home. Data shows that renters spend much more of their incomes on housing than homeowners do, in part because rents tend to rise every year.
Advertisement
Related Stories
Build to Rent
Build-to-Rent Is Booming, Particularly in These Metros
A recent report finds that the Phoenix metro leads with more than 4,000 build-to-rent units completed in 2023, and Texas is the leading state for build-to-rent development
Sales + Marketing Trends
Brand Loyalty and Why Builders Should Think Like a Hospitality Brand
Whether its offering that personal touch or incorporating experiences into amenity use, home builders have something to learn from the hospitality industry
Market Data + Trends
Hottest Markets for Rental Activity in February
Looking at February's rental activity, the West continued to be the most desirable region for apartment hunters for the second month in a row, with the South close behind