Five Things to Know About the Evolving Landscape of Build-to-Rent Housing

Ready for some good news? The Build-to-Rent (BTR) housing market is experiencing a remarkable surge across the United States. Last year (2022) witnessed an unprecedented 47% increase in completed new homes, totaling a staggering 14,541, compared to the previous year. And it's only projected to grow in the upcoming years, with BTR housing demand overwhelming supply.

Drivers of the BTR momentum

So what gives? Numerous factors contribute to the exponential growth of the BTR market. One pivotal driver is the escalating cost of homeownership. Currently, the median home price in the United States is at a hefty $425,177, placing it beyond the reach of many aspiring homeowners. In contrast, BTR housing provides a more affordable alternative for renters, with a monthly average of around $1,500 for a two-bedroom home.

Shifting demographics in the United States are also fueling the BTR expansion. As the population ages, more Baby Boomers choose to rent instead of buy. As well, the rise of single-person households is spurring an increased preference for rental living.

Furthermore, the flourishing gig economy is contributing to the BTR boom. With rising remote workers seeking convenience and affordability, BTR housing aligns perfectly with their needs. Sometimes it really is that simple.

Positive economic impacts

The growth of the BTR market isn't just confined to the housing sector; it has a ripple effect across the economy. This surge creates jobs, stimulates construction activities, and, most importantly, offers a solution to the affordable housing challenge for renters. Moreover, the BTR sector is making notable strides in addressing the housing shortage crisis in the United States.

Navigating challenges in the BTR realm

It's essential to recognize the challenges, such as the availability of suitable land for BTR developments. Finding land zoned for multifamily housing, a requirement for BTR projects, can be particularly tough in urban areas. Just ask any builder.

Another challenge revolves around the cost of construction. Rising prices of building materials and labor contribute to the overall increased expenses in constructing BTR housing, affecting rental pricing.

Unveiling future opportunities

Despite these obstacles, the BTR market is poised for continued growth in the coming years. You can't keep a good builder down. With the demand for BTR housing surpassing supply, developers are creatively overcoming these challenges. As a result, the BTR market is positioned to play a pivotal role in shaping the housing landscape of the United States. This makes it the perfect time to invest in construction project management software to competitively navigate the BTR market.

BTR insights: A closer look

Here are some key insights into the state of the BTR housing market in the United States:

• Sunbelt States' Appeal: The BTR market is most vibrant in Sunbelt states such as Arizona, Texas, and Florida, thanks to their warm climate and booming job markets.
• Construction Project Management Software: The right software solution should offer seamless integration designed specifically for new residential construction, catering to both production and semi-custom home builders. It's crucial to ensure you select software that encompasses a complete array of tools essential for home builders, empowering you to optimize efficiency, foster collaboration, and elevate overall productivity.
• Urban Growth: Urban areas are also experiencing substantial BTR growth. Cities with high living costs, such as San Francisco, New York, and Los Angeles, are witnessing a strong demand for BTR housing.
• A Diversified Market: Developers are diversifying their BTR offerings to cater to different segments, including luxury BTR, student BTR, and senior BTR.

Conclusion: BTR — A sector to watch

In summary, the BTR market is experiencing a meteoric rise in the United States, driven by changing demographics, affordability concerns, and the rise of the gig economy. As the market continues to evolve, it's a dynamic sector that should be navigated with the right construction project management software.