Housing Starts in 2025 Shift Toward Multifamily and Build-to-Rent

Affordable Multifamily Housing for Rent

In 2025, the U.S. housing market is seeing a clear shift as multifamily and build-to-rent projects gain ground while single-family home starts decline. Rising construction costs, high mortgage rates, and affordability challenges have led developers to focus more on rental housing, which offers steadier income streams amid a tougher for-sale market.

Nearly 94% of new multifamily construction starts are rental units, reflecting strong demand from households unable or unwilling to buy due to elevated prices and borrowing costs. Build-to-rent communities are also expanding rapidly, attracting investment from institutions seeking to serve renters who want single-family homes without the burden of ownership.

Although multifamily construction remains elevated due to momentum from previous years, experts expect new starts to slow by mid-2025 before stabilizing to long-term norms. Rent growth is moderate as new supply eases pricing pressure, and vacancy rates have ticked up slightly but still remain near historical averages.

Overall, the housing market is realigning toward rental housing, driven by economic and demographic shifts that favor multifamily and build-to-rent options as key solutions to the nation’s evolving housing needs.

Ashland Capital focuses on multifamily and student housing properties which benefit from the favorable supply/demand imbalance nationally.