Rise of Renting
2023 has ushered in a strong trend of Americans opting for rental living over homeownership, with single-family homes emerging as a top choice.
The growing barrier to entry to buy has changed the shape of the housing market. With many shying away from the commitment of increased mortgage rates, rentals have become a necessity for many. But a new trend across the market is making renting even more attractive.
The US housing landscape remains divided throughout the country. Pricier neighborhoods are typically owner-occupied, while rental properties tend to cluster in less desirable areas.
This division may be bridged by the emergence of built-for-rent housing, or BFR. BFR is reshaping the rental market by closing the gap between the luxury of neighborhoods and the affordability of rental living. These rental houses offer tenants the unique advantages of a home, without the commitment to a single location or mortgage.
Unlike traditional rental houses scattered around cities, BFR homes are thoughtfully planned and grouped together, fostering a sense of community. Plus, many offer shared amenities like fitness centers or pools. BFR makes the feel of homeownership more accessible to the many Americans currently priced out of the housing market.
For many in the market, BFR could become a more desirable and attainable milestone than buying a home.
Tenants live in brand-new houses with professional property management and numerous amenities, without the down payment and lock-in period associated with a mortgage. Even landlords could find these properties appealing, as BFR properties are purposefully built for easier maintenance. Renewal rates of around 75% speak to the ease BFR offers to lessors and lessees alike.
Depending on individual circumstances, BFR could be a smart move to those swept up in the shifting tides of the housing market. It may not wash away all the current housing woes, but it is a step toward a more balanced housing ecosystem — one that’s changing faster than you can say, “Home sweet rented home.”
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