Homebuilders play a fundamental role in accelerating supply growth in the single-family build-to-rent (BTR) market by developing communities on existing land parcels when renter demand is elevated. Some of the largest single-family rental operators are enlarging their inventories by partnering with homebuilders or buying newly built communities.

This is a shift from the more traditional strategy single-family rental operators have taken of acquiring individual homes to grow their inventory, according to a Northmarq BTR market report. This signals a preference for purpose-built single-family rental communities among some of the largest operators, including Invitation Homes and American Homes 4 Rent.

Both starts and completions of single-family for-rent units have increased this year, with notable inventory growth across the Sunbelt. More than 40,000 BTR units were started during the first half of 2024, up 24% from the same period last year, according to the report. Construction starts in the first half of this year were about 5% ahead of the prior peak in 2022.