Soaring Home Prices Drive 2025 Build-to-Rent Market, Anticipating 110,000 New Homes

With 21,812 homes in development, Texas is leading the nation in BTR properties, followed closely by Arizona with 13,972 and Florida with 13,591.

Doug Ressler, who manages business intelligence at Yardi Matrix, a division of Point2Homes, explains to The Epoch Times that one of the main reasons people are opting to rent instead of buy is affordability.

“On average, renting a BTR unit is more economical than purchasing a starter home,” he stated. “Recent research shows that renting can save an individual around $1,000 monthly compared to buying, due to soaring mortgage rates and increased home prices resulting from the nationwide housing shortage.”

Ressler noted that millennials and Generation Z are increasingly favoring rental options over homeownership due to challenges in saving for down payments. Many are still managing student loans, while others are embarking on their careers with limited savings.

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“BTR communities often cater more to the preferences for mobility, flexibility, and modern amenities, without the burden of home upkeep and repairs,” he added.

The Point2Homes report indicates that the number of BTR residents surged by 36 percent in 2024, compared to 27 percent in 2023. As BTR developments increase, the total availability of single-family homes for rent is projected to rise by 50 percent across the top five states, including North Carolina and Georgia.

Texas, being the second-largest state in land area after Alaska, offers plenty of land and fewer bureaucratic hurdles for construction.

“Often, states west of the Mississippi have significantly less red tape for building houses and businesses,” Ressler remarked.

He also pointed out that BTR developers often focus on suburban regions just outside major urban centers, allowing properties to provide more space, greater affordability, and convenient access to these urban areas.

Christy Gessler, chair of the Texas Association of Realtors, shared with The Epoch Times that the demand for housing throughout Texas is on the rise.

“While the Texas Real Estate Research Center indicates Texas is first nationally for new housing construction permits, demand still exceeds supply,” she stated.

In 2024, permits soared to over 136,000.

“Rentable properties play a vital role in the housing market ecosystem,” she added.

“Homeowners can build equity and benefit from tax advantages,” she noted. “Homeownership may also yield social benefits, such as community involvement.”

The greater Phoenix region currently leads the metropolitan areas nationally in single-family home rentals, boasting over 13,000 units—almost twice the available units in Dallas.

“Phoenix has consistently attracted migrations within the U.S.,” Ressler commented. “Individuals from various parts of the nation, especially from the Northeast, are drawn to the area for its warm climate and job prospects.”

Arizona’s capital and largest city houses not only major Fortune 500 corporations but also numerous new tech firms that draw a plethora of job seekers. Major employers in the area include Honeywell Aerospace, Intel Corporation, Wells Fargo, American Express, Amazon, and Avnet.

“The influx of technology into the region is driving a tremendous demand for housing,” noted Sindy Ready, president of the Arizona Association of Realtors, in her remarks to The Epoch Times. “Consequently, our inventory of homes for sale and rent is extremely limited.”

Ready, who has over 25 years of industry experience, expressed that she is not worried about BTR properties encroaching upon the buying market.

“We have been observing this type of housing emerge in our area for about five years, and given the current lack of inventory, I don’t perceive it as adversely impacting the sales market,” she stated. “It presents another alternative for individuals who prefer not to live in an apartment but still want the advantages of having their own home, free from neighbors above or below.”

Furthermore, she believes that BTR properties serve as an excellent choice for newcomers uncertain about where to purchase, or for those who have undergone lifestyle changes such as relocation, marriage, divorce, or downsizing.

“I don’t consider this to undermine the home-buying market, as there remains a substantial demand for homes,” she concluded. “It’s an effective transitional option for those taking the time to determine their next steps.”

While homebuyers generally need to provide a 20 percent down payment (equating to $91,097 based on the median price), first-time buyers can often leverage Federal Housing Administration programs that require just a 5 percent down payment ($22,774 based on the median price). Veterans may qualify for a zero percent down payment option.

“As it stands, we may face a housing shortage for the next decade, especially as more individuals approach the home-buying age,” she remarked.

Dallas ranks second for the highest number of BTR properties under development, with 8,470. Atlanta follows in third place with 6,885 new units planned for this year, while Charlotte, North Carolina, has 5,638 and Austin, Texas, boasts 4,313 units.

Ressler argues that, in light of the continuously rising home prices, consumers are left with the decision to either pour all their savings into purchasing a home or to enjoy single-family living without overwhelming financial obligations.

“Currently, it appears they are pursuing a rapidly ascending trend,” he commented. “Once they accumulate enough for a down payment, they still encounter additional costs such as taxes and ongoing maintenance.”

While some renters might eventually choose to buy, others may prefer to continue renting and dedicate any extra funds toward vacations or other expenditures.

“At present, the market continues to be undersupplied,” he noted. “We anticipate ongoing BTR growth as more people opt for a flexible lifestyle disconnected from the responsibilities of home ownership.”