Home builders are finally responding to market conditions and taking the unusual step of building single-family properties specifically to rent them out, CNBC reported. The trend may provide at least a partial explanation as to how multi-family construction fell while single-family construction rose in today’s housing starts data — despite the fact that the market for rentals has arguably never been hotter and the home sales market is only starting to show signs of life.
“With the economy the way it is, and there are so many people with mortgage issues… and just recognizing these issues will not go away soon, we felt like how could we deliver high quality rental housing in a product that single-family homeowners would appreciate?” said Texas developer Joe Petersen of Insight Real Estate Strategies. Petersen intends to build homes with rents averaging about $1,800 per month.
The move could also satisfy investors, as the demand for foreclosed properties to rent out far exceeds the remaining supply of such properties on the market. With that in mind other home builders, including Beazer Homes, have recently launched businesses that acquire properties and aim to improve them and rent them out before ultimately selling them. [CNBC]