Surging demand for build-to-rent projects has pushed Texas to the top of the nation for home rental construction in the pipeline, with Dallas-Fort Worth at No. 2 among all large metros based on the same metric.
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The Lone Star State's total of nearly 22,000 BTR projects on the way is over 56% higher than Arizona, which is the next closest state with nearly 14,000 projects in the pipeline.
The only metro to surpass DFW's almost 8,500 home rental projects under construction was Phoenix, which has more than 13,000 BTR projects in the works, according to an analysis from Point2Homes using data from Yardi Matrix.
Texas' three other largest metros each placed in the national top 10 for under-construction projects of the multifamily housing option that feels more like single-family residential. Houston was at No. 5 in the nation with more than 4,600 BTR projects under construction, followed by Austin at No. 6 with 4,300-plus units on the way and San Antonio at No. 8 with nearly 3,000.
“As urban areas become more congested and expensive, there’s a growing trend towards suburban living,” Yardi Matrix Manager of Business Intelligence Doug Ressler said in a statement. “BTR properties in suburban areas offer more space and affordability while maintaining connectivity to urban centers.”
The biggest chunk of BTR projects under construction in DFW are Fort Worth’s more than 1,800 rental homes in the pipeline, CultureMap Dallas reported. More than a third of those will be part of Living Fully Orchard Farms development in Fort Worth.
McKinney has nearly 1,300 units on the way, the only other city close to Fort Worth’s total, though Princeton and Melissa also have huge BTR communities on the horizon. Oxenfree at Princeton will feature more than 400 BTR units, while Wolf Creek Farms will bring nearly 350 units to Melissa.
The state’s strong job market, openness to remote work and business-friendly climate were cited as reasons for the growth of BTR in Texas. BTR's affordability was also a factor, as Ressler said renters can save around $1,000 per month compared to elevated home prices and high mortgage rates.
“The biggest hurdle to buying a home for BTR residents is high mortgage rates, so BTR homes provide an affordability solution in today’s increasingly expensive housing market,” Ressler said. “On average, renting a BTR unit is cheaper than buying a starter home.”
Atlanta's nearly 7,000 BTR projects on the way placed it at No. 3 in the nation, followed by Charlotte at No. 4 with more than 5,300 units in the pipeline.
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