Single-family rents aren’t rising like they used to, even though new rental neighborhoods keep popping up all over the country. So, what’s going on? Are these trends linked?

For a long time, small independent investors loved single-family homes. They were easy to find, came with flexible financing, and felt like a safe bet. After the 2008 housing crash, these homes looked even better—affordable, profitable, and easy to finance with those low interest rates.

Fast forward to the early 2020s, and investors really jumped in. Almost a third of all investor home purchases were single-family homes. By late 2024, the average asking rent for these homes had skyrocketed—up more than 40% from before the pandemic. Even though rents are still high, the runaway growth has slowed down.

Why Rents Aren’t Climbing as Quickly

A big reason? There’s just more to rent now—especially single-family rentals. Developers are building like crazy in the suburbs, finishing tens of thousands of new rental houses in 2024, which is about 16% more than last year. This surge is giving renters in big cities and nearby suburbs more options.

Build-to-Rent (BTR): Changing the Game

One of the biggest shifts in the market is the rise of build-to-rent communities—neighborhoods full of single-family homes built just for renters. These places offer the space and privacy of a house with the perks of a luxury apartment complex. Big investors and real estate funds are pouring billions into them.

In 2024, builders started work on about 23,000 single-family BTR homes in just the second quarter—almost 10% more than the year before. By year’s end, over 130,000 BTR homes had been built or sold to investors, more than double the number from 2019.

The pandemic changed what people want in a home. Renters now look for more space, private yards, and a sense of community—stuff most apartment buildings just don’t offer. So, BTR homes are catching on fast, especially with families and professionals who want comfort but don’t want to own.

Traditional Landlords Feeling the Squeeze

This boom in BTR is great for renters, but it’s making life tougher for small landlords who own just a house or two. Big developers and investor groups can offer new homes, reliable maintenance, organized management, and fancy amenities—all at a scale that’s hard to beat.

But small landlords aren’t out of the game. They usually keep costs down and offer more personal service. Plus, big construction projects can hit roadblocks—think economic uncertainty, rising material costs, or shifting investor moods.

Here’s a twist: BTR construction actually dropped by nearly 40% from early 2024 to early 2025. Still, experts see a comeback by 2027, once current projects finish up and start bringing in rent.

Why Invest in Build-to-Rent?

Even with the recent slowdown, there’s still room for individual investors in BTR. Buying into a BTR community can mean steady passive income and some solid perks:

Premium Amenities
Think fitness centers, clubhouses, pretty gardens, walking trails, dog parks, and coworking spaces. These extras help attract tenants and support higher rents.

More Options
Investors can pick from single-family homes, duplexes, or townhomes—all in the same community.

Professional Marketing
The community’s marketing team helps fill units faster, taking some of the pressure off.

Scale Up Easily
Want to grow? You can buy several homes in one place, making management a lot simpler.

Hands-Off Management
Most BTR communities are professionally managed, so you don’t have to sweat the details of repairs, leasing, or tenant issues.

All in all, the rental market’s changing fast, and build-to-rent is right at the center of it. Whether you’re renting, investing, or just watching the trends, it’s a space worth keeping an eye on.

The Downside of BTR Investments

Investing in build-to-rent (BTR) housing sounds easy, but it’s not all smooth sailing. There are some real drawbacks you should keep in mind.

First off, the cost to get in is steep. These places are brand new and packed with nice features, so sellers aren’t really open to deals. If you need a loan, especially at today’s high interest rates, your cash flow probably won’t grow as fast as you’d like.

There’s another thing—market saturation. BTR projects are popping up all over the place. In some areas, there are just too many units, which means more empty homes and less rental demand.

You’ll also run into limits on pricing. In most BTR communities, you can’t just charge whatever you want. Rents tend to stay in line with the rest of the neighborhood, so you don’t have a ton of wiggle room.

The Bigger Picture: Rent Growth and Market Dynamics

Rent trends really come down to supply and demand. Lately, construction has ramped up across the U.S., which helps meet demand and keeps rent hikes in check. Still, people in the industry say there’s a big housing shortage—about 4.7 million homes short. Once the current wave of new homes slows down, rents could start climbing again.

Right now, developers are hitting the brakes on new projects because building is expensive and the market feels uncertain. That slowdown could mean higher rents down the road, as fewer new homes come on the market.

Strategic Takeaways for Investors

What should you do? Well, that depends on your style and resources.

If you’re up for rolling up your sleeves—maybe flipping homes, rehabbing, or bidding at auctions—this softer market could be your chance to pick up homes at a discount.

If you’d rather take it easy, you might want to stick with BTR communities or turnkey rentals, where a professional manager handles the day-to-day stuff.

Final Thoughts

The way rent and build-to-rent housing interact is changing the U.S. rental scene in a big way. Even though rent growth has slowed, demand is still strong and there aren’t enough homes to go around.

As BTR communities settle into the suburbs, they’re changing how investors, renters, and developers all think about housing. Whether you’re a small landlord trying to keep up or an investor hunting for your next move, understanding market cycles and acting with a plan—balancing what you make now with long-term growth—makes all the difference.