The demand for build-to-rent housing is expected to remain high in 2023, despite concerns regarding a recession. Brad Hunter, President at Hunter Housing Economics, notes a certain decline of activity in the rental market at the moment because people are afraid of the forthcoming crisis. Market players may have to make mutual concessions. Rents are no longer growing, but neither are they dropping.
Mr. Hunter, however, believes that rentals may still grow in the future. They are expected to increase by 6% by this fall. Their subsequent growth may reach 5–6% per annum starting from 2024.
The factors increasing the demand for residences include extremely small volumes of new construction oriented at young families. The millennials get children approximately 10 years later than previous generations, but such families will have more kids over the next few years, and the increasing demand will be satisfied by the rental market. This will enable young families to have a private home and a land plot in suburbs, near good schools and green parks.
Analysts of the residential property market should track the household formation rate, which is a useful indicator. It experienced a slump in the second half of the previous year but is supposed to return to the level of 1.3–1.5 million new households per year. This will create an annual demand for 130,000–180,000 rental homes.
The house rental market is expected to demonstrate the strongest growth and best performance in southeast states, primarily in Florida with its record-setting in-migration levels. Experts expect this to occur as early as in 2023 and reach full swing in 2024–2028.