Build-to-Rent Is Gaining Momentum

Quick takeaways

• Demand for rental housing remains historically strong as affordability challenges keep households renting longer.¹

• Build-to-Rent (BTR) combines the lifestyle benefits of single-family homes without the long-term financial commitment of homeownership.¹

• Multifamily fundamentals may strengthen as new supply slows and occupancies tighten.⁴

• High-growth regions, including the Mountain West, continue to attract population, jobs, and rental demand.⁵

The Rise of Build-to-Rent Housing

BTR communities are purpose-built neighborhoods planned specifically for renters and often designed as townhome or single-family-style communities.¹ These communities typically offer more space, privacy, and neighborhood-style amenities than traditional apartments, without the financial and maintenance responsibilities associated with homeownership.¹

Demand for BTR has grown rapidly in recent years as homeownership has become increasingly difficult for many households.¹ Higher mortgage rates, elevated home prices, and limited for-sale inventory have pushed many households toward renting by necessity.³ At the same time, lifestyle-driven renters are prioritizing flexibility, leading younger families, professionals, and downsizing retirees to seek rental options that resemble for-sale housing in form and function.¹

Occupancy across BTR communities has remained generally high and, in some data, slightly above multifamily overall, although results can vary by market.² Institutional capital has followed, with investors increasingly viewing BTR as an extension of multifamily housing rather than a separate asset class.⁶ While the sector has expanded quickly, BTR still represents a relatively small share of total U.S. housing supply, leaving room for continued growth as demand persists.²

According to The Wall Street Journal, large single-family rental operators and private equity firms have already been shifting toward build-to-rent strategies, and future regulatory clarity may accelerate that trend.

Policy Tailwinds Are Accelerating BTR Momentum

Recent federal policy developments may further accelerate the growth of BTR housing. In January 2026, the White House issued an executive order directing federal agencies to issue guidance intended to limit certain institutional acquisitions of single-family homes and to include “narrowly tailored exceptions” for build‑to‑rent properties that are planned, permitted, financed, and constructed as rental communities.⁶

We believe the distinction is significant. While the policy focus is on large investors acquiring existing homes, often framed as competing with individual homebuyers, BTR communities are developed from the ground up as rental neighborhoods, adding new housing supply rather than absorbing existing inventory.⁶ As a result, BTR has avoided the type of political scrutiny facing traditional single-family rental portfolios.⁶

While the outcome of these policies remains uncertain, some industry participants have suggested this exemption could influence capital allocation decisions.² According to The Wall Street Journal, large single-family rental operators and private equity firms have already been shifting toward build-to-rent strategies, and future regulatory clarity may accelerate that trend.⁶ Since 2012, more than 321,000 BTR homes have been delivered nationally, with over three-quarters built in just the past five years, underscoring the sector’s rapid expansion amid rising affordability pressures.⁶

Beyond regulatory considerations, the BTR model may offer operational efficiencies. Concentrated rental neighborhoods are generally less costly and more efficient to manage than scattered single-family homes, while still delivering the space and lifestyle features renters increasingly prefer.² Certain economists also believe that demand for single-family rentals is driven by structural factors - including home prices, mortgage rates, and demographic shifts - that may be slow to reverse.³

Taken together, policy clarity, operational efficiency, and sustained renter demand may support BTR’s continued role as a key component of the U.S. rental housing market.³

Markets in the Mountain West often exhibit a favorable balance of demand drivers and supply constraints, creating conditions that may support stable occupancy, competitive rent levels, and long-term asset durability.

Why the Mountain West Stands Out

While rental housing demand is national in scope, certain regions may be positioned for continued demand. The Mountain West has emerged as a standout due to strong population growth, job creation, and relative affordability compared to coastal markets.⁵

States such as Colorado, Utah, Idaho, Arizona, Montana, and Nevada continue to attract new residents seeking economic opportunity and quality of life, driving sustained demand for both apartments and rental homes.⁵ At the same time, land availability and development feasibility vary by market, supporting more disciplined growth patterns than in prior cycles.⁵

Markets in the Mountain West often exhibit a favorable balance of demand drivers and supply constraints, creating conditions that may support stable occupancy, competitive rent levels, and long-term asset durability.⁵

Current Market Context

Higher interest rates have reduced transaction volumes and softened pricing in certain markets and in some cases acquisitions may be below estimated replacement cost.¹

At the same time, rental fundamentals currently appear stable overall. Occupancies are high, demand is durable, and new supply is moderating across much of the U.S.¹ Investors deploying capital in the current environment may benefit from current income while positioning for potential upside as financing conditions evolve.¹

Importantly, we believe that housing affordability challenges may be structural rather than temporary. To us, the widening gap between renting and owning, combined with demographic and economic trends, suggests that a growing share of households expect to remain renters long-term,³ which could underpin sustained demand for both BTR and multifamily housing.

A Long-Term Perspective

We believe BTR investments are not about chasing short-term trends. They are about aligning capital with long-term shifts in how people live, work, and form households.³ Rental housing meets a fundamental human need and has repeatedly demonstrated resilience during periods of economic uncertainty.¹

By focusing on well-located assets in growth markets, and emphasizing quality, discipline, and operational execution, we believe BTR and multifamily can support long-term investment objectives over time. That conviction - grounded in data and long-term fundamentals - is why we continue to invest in these strategies and continue to monitor current market conditions.