Build-to-Rent Poised for Growth Amidst Housing Affordability Challenges

By RadCRE Research · 2026-10-18 · Market Updates

The build-to-rent (BTR) sector is attracting significant investor attention, driven by increasing demand as homeownership becomes less accessible for many Americans [2].

Market Dynamics Fueling Build-to-Rent Demand

The build-to-rent (BTR) segment of the housing market is emerging as a significant focus for real estate investors and developers, driven by shifting demographic preferences and affordability challenges within the traditional homeownership market. Experts suggest that BTR opportunities are growing for the 2027–2028 timeframe [1], positioning single-family rentals (SFRs) as a pivotal component of future real estate investment strategies [2].

As homeownership costs continue to rise, a growing number of Americans are opting to rent for longer periods [2]. This trend is creating robust demand for single-family rental homes, which provides new avenues for investors and developers [2]. The Relentless Growth Podcast, featuring Chase Calhoun and Jack Maher, recently delved into the BTR investment strategy, highlighting its increasing popularity and the mechanisms for investors to capitalize on the demand for newly constructed rental properties [2]. Calhoun shared his progression from renovating existing homes to developing his initial single-family rentals on infill lots, eventually scaling to larger BTR projects. Maher also emphasized his family's extensive experience with single-family rentals, expressing confidence in the continued expansion of this housing market segment [2].

Investor Strategies Amidst Market Constraints

The current real estate landscape, characterized by higher borrowing costs, is making both housing less affordable for buyers and new construction more challenging to undertake [3]. However, this environment is simultaneously creating unique buying opportunities for discerning investors [3]. David Steinbach, Global CIO for Hines, suggests that while interest rates often dominate investor focus, it is crucial to look beyond these immediate costs and prioritize property-level fundamentals [3]. He advises investors to underwrite based on intrinsic value rather than solely on going-in rates, and to target markets where limited new construction is likely to support strong rental growth [3].

Similarly, Principal's Devin Chen indicates that although the commercial real estate market may be past its peak repricing phase, merely acquiring properties at a discount will not guarantee success in the recovery [4]. The critical factor for investors now is the property's ability to generate increased income and defend its market position [4]. This selective approach to investment aligns well with the BTR sector, where new-construction rentals offer advantages over older homes, such as lower maintenance costs and modern amenities that appeal to today's renters [2].

Capital Raising and Future Development

Evidence of strong investor confidence in the rental housing sector is further underscored by recent capital raises. Continental Properties Company, Inc. successfully closed its multifamily development fund, raising $203 million through Continental Properties Real Estate Development Fund IV, L.P. [5]. This capital infusion is earmarked to finance the development of 10 to 15 new multifamily communities, specifically under their Springs Apartments and Authentix Apartments brands, primarily in suburban locations [5]. While this raise is for multifamily, it underscores the broader investor appetite for new-build rental housing and the strategic pursuit of selective development opportunities in high-demand areas [5].

RadCRE Perspective

"The prevailing market conditions—elevated home prices, tighter credit, and a fundamental shift towards renting longer—create a compelling environment for build-to-rent and single-family rental investments. We are seeing sustained demand for quality rental housing, particularly new construction that offers modern amenities and lower operational costs. As interest rates stabilize, the focus must sharpen on fundamental market analysis and identifying communities with strong demographic tailwinds and constrained supply. For our clients, this isn't just about buying; it's about underwriting the long-term income-generating potential and understanding the granular, hyper-local dynamics that drive rental growth."

Tags: build-to-rent investing, single-family rentals, CRE market outlook 2027, housing affordability crisis, real estate development funding