Dive Brief:

• The market share of single-family homes built-for-rent was 4.4% in the third quarter of 2016, compared to the 2.8% historical average and down from 5.8% in early 2013, according to an analysis of Census Bureau data by the National Association of Home Builders. 

• The third-quarter figure, which is measured on a one-year moving average, was down slightly from a share of 4.5% in the second quarter and 4.3% in the first quarter. By comparison, the single-family home segment of the rental housing market was 35% for the period as existing homes tend to be turned into rental housing as they age.

• Over the last four quarters, single-family built-for-rent starts totaled 32,000 compared to 28,000 in the prior four quarters.

Dive Insight:

The latest figures underline a post-recession increase in renting and a push being made in this category by homebuilders as home and rental prices remain elevated and their stock in short supply.

Young first-time homebuyers, in particular, are hovering at the edge of the market as interest rates climb following the election, prices and inventory conditions only begin to soften in some markets and student loan debt makes saving for a down payment a challenge for some.

A report earlier this month from real-estate listing website Zillow found that more than half of individuals looking to rent a home considered buying one instead. Meanwhile, two-thirds of millennials who purchased a home had considered renting as an alternative.

There are signs that a shift among younger buyers toward homeownership is occurring. In its October report on previously owned home sales — the category that typically attracts first-timers — the National Association of Realtors found that first-time buyers followed their strong performance in September by nearly equaling it in October with a 33% share of sales as the category neared a 10-year high.

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