According to the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, there were 11,000 single-family built-for-rent starts for Q2 2019. Speaking to NPR, Josh Hartmann, CEO of built-for-rent developer NexMetro Communities, stated that many of these renters in the single-family built-for-rent space are not families losing homes to foreclosure wouldn't want to go back to renting apartments, like he expected originally.
"What we were shocked to find out was it was people that had great credit, they had money for down payments, they had great incomes but they just didn't want to own a home," Hartmann says. "They were a lifestyle renter, renter by choice."
NexMetro has built 2,800 built-for-rent homes so far in Colorado, Arizona and Texas, which fil up quickly with a mix of renters, including aging baby boomers and millennials. However, William Wheaton, a housing economist at MIT, notes that “owning still makes much more sense.”
"If prices continue to rise like they have in Denver, buying in Denver will be a money tree," Wheaton told NPR. "But even if you're a very cautious and say, 'No, no, no, they're not going to continue to rise a lot, they'll inch up a few percentage points each year' over five or 10 years, that adds up to a sizable nest egg. And that's what you're giving up by renting."
Hartmann says he too hopes more young people buy homes and build equity, though renting by choice is increasing.
According to a post on the National Association of Home Builders' (NAHB's) Best in American Living blog, renting by choice–instead of owning outright–is becoming increasingly popular among millennials.
The blog said that this was where newly constructed built for-rent single-family homes came into the picture. These homes, according to the blog, present millennials "with a terrific opportunity to live the American dream–without the additional responsibilities and stress of homeownership."
The blog indicated that one of the key reasons for the rise of these built-for-rent homes was diminishing affordability.
The post, written by BSB Design, said that transitioning from a multifamily property to a single-family home was a "move-up" solution for families that desired "to have the flexibility to travel, live a low maintenance lifestyle, or avoid financial burdens."