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Southern markets, particularly top Sun Belt cities, are taking the lead for built-to-rent housing construction.
Phoenix came in at No. 1, with more than 10,000 BTR housing units underway as of September, according to a report from RealPage Market Analytics. Dallas followed in second, with about 5,800 units under construction. All of the top 10 markets for built-to-rent housing in September were those in Southern states, where multifamily rents have tanked lately amid a supply glut.
Although Phoenix was also first a few months ago, the metro had about 13 percent fewer units under construction in September compared to June, when it had about 11,600 units underway.
Nationwide, there has been a drop in the number of built-to-rent units being developed, though overall activity remains strong, according to the real estate data firm. In September, developers were constructing about 63,800 units across the country, a 0.7 percent drop from the 64,200 units that were under construction in June.
By region, the South is dominating overall, with some 37,700 built-to-rent units underway. This figure was 2.3 percent higher than the number of units underway in June and was more than the other three regions put together, according to RealPage.
Of the four regions, only the West saw its number of units fall in recent months. In September, the West posted 17,400 units under construction, which was a 10 percent drop from a couple of months prior.
Built-to-rent construction, often single-family detached homes, is not the only type of residential construction that has experienced a pullback this year, as economic uncertainty, supply chain disruptions and elevating pricing and borrowing costs loom large over the industry. In August, starts of privately-owned housing totaled 1.3 million, 8.5 percent down from the month before and 9.7 percent down from the year before, the U.S. Census Bureau reported.