Build-to-rent housing became a very bright spot in the new home market as interest rates rose, for-sale inventory shrank, boomers looked to get out of owning and bank equity and those relocating waited to buy until they were more settled. Now, according to Northmarq, construction starts are declining at the same time economic uncertainty clouds the horizon and new household formation slows. But the big question is how long will this latest wrinkle last? 

The BTR market is not a copy-cat of the for-sale single-family housing market where starts declined dramatically in 2022's second half. Builders in the BTR niche recognized an opportunity to construct houses for those who like the idea of a private yard, more square footage than most apartments and the potential camaraderie from being in a neighborhood with other homes.

At the same time, the health of BTR housing is not black and white but more nuanced with ups and downs predicted. Last year 2002's construction starts were very strong at 76,000 units, up more than 25% from the prior year. Starts increased during the middle of that year and slowed a bit in the fourth quarter. Altogether, completions totaled about 65,000 units, up more than 20% from 2021's total.