After Years of Growth, Single-Family Rentals ‘Stabilizing’

In the wake of the housing crisis, single-family homes grew to more than one-third of U.S. rental stock nationwide. Now, says the Joint Center for Housing Studies at Harvard University, that dramatic growth has stabilized.

In a report, With the Foreclosure Crisis Behind Us, Have We Stopped Adding Single-Family Rentals?, Joint Center Research Analyst Shannon Rieger said since 2014, the foreclosure inventory has largely cleared and few new foreclosures have been filed. Not surprisingly, Rieger said, there was also little growth in the stock of single-family rental units 2014-2016.

The report said single-family rentals grew by an average of 483,000 a year between 2006 and 2014, but between 2014 and 2016, the stock grew by only 22,000 units. According to Joint Center analyses of data from the American Community Survey and other sources, the nation’s stock of single-family rentals grew from 12.2 million units to 16.1 million units in 2016, with virtually all of the growth (99 percent) occurring between 2006 and 2014. This 32 percent increase in the single-family rental stock far outpaced the 11 percent increase in the nation’s stock of multifamily rental units, which grew from 26.0 million to 28.9 million between 2006 and 2016.

As a result, the report said, single-family homes now represent more than one-third (34 percent) of the rental stock nationwide. Additionally, the growth in single-family rentals has provided an important source of housing for families with children. Single-family homes accommodated 84 percent of the growth in renter households with children between 2006 and 2016.

“A decade of growth in the single-family rental market has fundamentally reshaped the nature of rental housing across the country, with states hard-hit by the foreclosure crisis seeing particularly notable changes,” Rieger said. “It remains to be seen if this recent shift is a short-terms pause or if it represents the culmination of the past decade’s trend of significant growth in single-family rentals.”

The report noted most of these new rental units were not new construction. Between 2006 and 2016, only 366,000 new attached and detached single-family homes were built as rental units. This, in turn, indicates that about 3.5 million of the single-family rental units added to the stock 2006-2016 were existing structures that had previously been owner-occupied homes.

The report also said this trend of converting single-family homes to rentals was unevenly distributed across the country, with the greatest increases occurring in the states with higher than average foreclosure rates, according to JCHS analysis of data from the Mortgage Bankers Association and the ACS. For example, between 2006 and 2016, Nevada’s stock of single-family rental units grew by 63 percent–faster than any other state in the country. And the foreclosure start rate in Nevada peaked at 3.8 percent in 2009, the highest rate of any state 2006-2016 and more than double the nation’s peak rate of 1.4 percent.

Arizona and Florida also experienced particularly high foreclosure rates and unusually large increases in their stocks of single-family rental units. Arizona’s foreclosure start rate peaked at 2.6 percent in 2009, and its single-family rental stock grew by 61 percent between 2006 and 2016. Florida’s foreclosure start rate hit a high of 2.8 percent in 2009, and its single-family rentals grew by 50 percent in the decade leading up to 2016.

“While these data do not tell us exactly how many of these homes completed the foreclosure process and were subsequently converted to rental units, they do suggest that, as many have reported, large numbers of foreclosed homes were bought by investors who converted them to rental units,” Rieger said.

The report can be accessed at