Single-family rentals thrive despite dips
The U.S. multifamily rental market experienced modest growth in early Q2 2025, with average asking rents increasing slightly, despite a decline in the national occupancy rate to its lowest in over a decade. The build-to-rent sector continues to gain momentum both in the U.S., driven by high demand and institutional investments, while regional housing markets show varied trends, with some areas facing inventory increases and price declines.
The U.S. multifamily rental market showed modest growth in early Q2 2025, with average asking rents increasing by $5 to $1,736 in April, representing a 0.9% year-over-year increase. The national occupancy rate declined to 94.4% in March, reaching its lowest level in over a decade, while the single-family build-to-rent sector saw asking rates rise to $2,178 with occupancy at 94.8%.
The rental market remains strong despite falling year-over-year rents, primarily due to high home prices and mortgage rates keeping potential buyers in the rental market, while the build-to-rent sector continues to expand with institutions expected to own 40% of single-family rental units by 2030. Supply constraints and reduced multifamily permitting suggest rental prices will likely remain elevated above pre-pandemic levels in the near future.
Rental prices remain more affordable than mortgage payments in many major markets, with renters insurance costing significantly less than homeowners insurance - averaging $170 annually for renters compared to $2,110 annually for homeowners according to industry data.
Berkadia has brokered the $31 million sale of Poplin Trace, a 99-unit build-to-rent community located in Indian Trail, North Carolina, about 15 miles southeast of Charlotte. Built in 2021, the property features three-bedroom townhomes with attached two-car garages and was 93% occupied at the time of sale.
The build-to-rent (BTR) sector in Atlanta and the Southeast is experiencing significant growth, with several companies like Ranch Cottages for Rent, ResiBuilt, and Jim Chapman Construction Group actively developing new rental communities across multiple markets including Tallahassee, Huntsville, and Savannah, offering amenity-rich cottage-style homes and townhomes to meet increasing rental demand.
Charlotte's build-to-rent housing market has experienced remarkable growth, with a 894% increase in single-family rental units over the past five years and 1,415 new completions last year, making it the 5th ranked city nationally for build-to-rent homes. The city is poised for continued expansion with nearly 4,900 additional rental homes currently planned or under construction.
Regional housing markets are showing significant divergence in 2025, with areas that boomed during the pandemic now experiencing increased inventory and price declines, while other regions demonstrate strength. The Sunbelt markets, despite current supply challenges, maintain strong fundamentals for future growth through continued population gains and above-average job creation rates.
Lincoln Avenue Communities has begun construction on The Ranches at Gunsmoke, a 271-unit affordable single-family rental community in Maricopa, Arizona, marking their first build-to-rent project. The development, which will serve households earning up to 60% of Area Median Income, includes duplexes and standalone homes with private yards and will feature amenities like a fitness center, pool, and solar carport system that will offset 50% of the community's electricity usage.
According to the latest Cotality Single-Family Rent Index (SFRI) report, U.S. single-family rental prices saw a 2.9% year-over-year increase in March 2025, marking the third consecutive month of growth after bottoming out in December 2024. Markets with large numbers of new rental units showed some softness in rents, as exemplified by Dallas which experienced a 0.5% annual decrease due to increased inventory giving renters more bargaining power.
Build-to-rent single-family home construction reached a record high of 39,000 completions in 2024, marking a 15.5% increase from 2023, with an additional 110,000 units currently under construction nationwide as millennials, remote workers, retirees and other groups drive demand for this housing option.
Florida's single-family rental market shows resilience driven by strong population growth of 475,000 new residents in 2024 and economic diversification beyond tourism into sectors like healthcare, technology, and financial services. However, the market faces challenges including infrastructure strain and the need to keep up with rapid population expansion while maintaining quality of life standards.
National rents declined 0.5% year-over-year, with the median monthly rent at $1,398, despite a slight 0.4% increase in May 2025. The rental market is showing signs of softness during what is typically peak season, with the national vacancy rate reaching a record high of 7% amid continued delivery of new apartment supply.