Arizona remains at the forefront of built-to-rent home construction in the United States, with the majority of planned units concentrated in the Valley region.
The latest data from the National Rental Home Council reveals that there are 2,011 built-to-rent homes planned or under construction per million residents across the state. In comparison, the national average stands at 345 homes.
The Significance of Built-to-Rent Housing
Built-to-rent housing presents a compelling option for prospective homeowners. It offers the benefits of property management services and a new home experience, all without requiring a down payment or a long-term commitment. As reported by Axios’ Felix Salmon, this housing trend has gained popularity due to its appeal to individuals who have resided in apartments for over a decade and are now seeking to start a family.
For many in this stage of life, purchasing a single-family home in the Valley is financially challenging, especially as rising interest rates have led to increased monthly payments. However, built-to-rent developments provide a more affordable alternative, with rental prices typically $1,500 lower per month compared to the average monthly mortgage payment for a single-family home, according to insights shared by Colliers researcher Thomas Brophy.
Phoenix’s Surging Built-to-Rent Market
Phoenix, in particular, has experienced significant growth in the number of single-family homes available for rent. A recent report from listing service RentCafe reveals that Phoenix tripled its inventory of single-family rentals between 2018 and 2022. Within the Valley region, 6,000 of the 8,200 built-to-rent units entered the market in the past five years.
Looking Back: The Evolution of Single-Family Rentals
Built-to-rent homes have a longstanding history, much like multi-family housing. Over the course of several decades, the built-to-rent market has developed and expanded, as highlighted by commercial real estate company CBRE.