Houston remains one of the top dogs in the built-to-rent game.
The Houston area has 4,836 rental homes under construction, ranking third in the nation behind Phoenix (7,236) and Dallas (6,841), the Houston Business Journal reported, citing RentCafe.
Last year, developers across the nation completed a record-breaking 27,500 single-family rental homes, marking a 75 percent surge from 2022 and a 175 percent increase from 2021. There are 45,400 rental homes under construction nationwide.
This surge can be attributed to factors including the pandemic-fueled remote work era, Millennials reaching prime nesting age, and challenges in home buying, like high mortgage rates. The built-to-rent craze is further fueled by heightened interest from institutional investors and established builders, signaling a historic peak for this niche.
Developers completed 488 rental homes in the Houston area last year, which ranked 15th in the nation. Yet, that figure equates to a whopping 67 percent jump from 2022, the outlet reported.
In Texas, the number of new rental homes soared by 159 percent, with the state boasting the largest supply of built-to-rent homes, at 15,600.
Over the past five years, 2,402 rental homes have been delivered to the Houston market, trailing only Phoenix, Dallas and Atlanta. Austin and San Antonio also cracked the top 10 for most completed rental homes over the past five years, with 1,720 and 1,299, respectively.
The trend of developers constructing entire rental neighborhoods gained traction following the housing crash in 2008, accelerated by factors such as Millennials seeking spacious yet flexible living arrangements and empty-nesters opting for lower-maintenance lifestyles. This trend has become commonplace in Houston, with built-to-rent sections integrated into master-planned communities.
Notable developments include Greystar Real Estate Partners’ built-to-rent community in Katy, and Howard Hughes’ Wingspan subdivision in Cypress. In addition, Landmark Properties has started construction on its second Houston-area community, The Everstead at Conroe, and Wan Bridge is chugging along with its plan to develop 1,000 rental homes across the region.
—Quinn Donoghue
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