Charlotte Leads North Carolina’s Build-to-Rent Housing Boom

News Summary

Charlotte is at the forefront of the build-to-rent housing trend in North Carolina, with over 5,300 homes under construction. The rising median home prices are fueling demand for rental options, prompting builders to respond to the housing crisis as many residents face challenges in homeownership. While the area braces for a population surge, scrutiny around corporate landlords adds a layer of complexity to the evolving housing market.

Charlotte: A Hotspot in North Carolina’s Build-to-Rent Housing Boom

As home prices continue to soar across the United States, Charlotte stands at the forefront of a booming trend in housing—the rise of build-to-rent homes. With rising median home costs making homeownership increasingly daunting, builders in Charlotte and the wider North Carolina area are stepping in to meet demand with more housing options for renters.

A Surge in Construction

In the Charlotte-Concord-Gastonia metro area alone, over 5,300 build-to-rent homes are currently under construction. This figure places Charlotte as the fourth-largest market for build-to-rent construction in the nation. Notably, more than 2,300 of these homes are being built specifically for those looking to rent. Other metros in North Carolina, such as Raleigh and Wilmington, are also participating in this housing trend, with about 2,900 and 1,800 build-to-rent homes respectively on the drawing board.

Overall, North Carolina is projected to add over 12,398 new single-family rentals, ranking it as the fourth highest market for single-family rental construction in the country. This growth comes as the area’s housing inventory struggles to keep pace with the influx of new residents and escalating demand.

Skyrocketing Home Prices Fuel the Trend

Homeownership is becoming a distant dream for many residents in Charlotte. The median sales price for homes has surged to $392,000, marking a 3.5% increase, while the average price has reached $493,487, up by 6.8%. In Mecklenburg County, figures are even more alarming, with a median home price of $445,000 and an average price of $592,670, representing increases of 4.7% and 8.7% respectively.

This steep rise in home prices is leading potential buyers to extend their renting period. Down payments and mortgage payments have increasingly become out of reach for many, with the average mortgage payment—including taxes—climbing by a staggering 75% since 2019. Build-to-rent homes then offer an appealing alternative, combining the benefits of space, amenities, and lower maintenance costs, without the hefty financial barrier of homeownership.

Population Growth Drives Rental Demand

The Charlotte region is experiencing a significant population influx; approximately 117 new residents move to the area every day. This constant stream of newcomers is intensifying the demand for rental housing options. Developers like Northwood Ravin and Crescent Communities are quick to respond, adding rental properties to cater to this burgeoning market, with rental prices starting at around $2,656 per month.

The Role of Corporate Landlords Comes Under Scrutiny

While the demand for these rentals is skyrocketing, concerns have been raised regarding corporate landlords such as Blackstone and Invitation Homes. Reports suggest these entities have engaged in alleged mismanagement practices concerning their rental properties. It has sparked scrutiny over the impact of corporate landlords on the housing market, particularly when it comes to rental pricing and homeownership rates. In light of this, the Federal Trade Commission is investigating these trends.

The Future of Housing in North Carolina

Nationally, the construction of build-to-rent homes is projected to increase existing inventory by 53.5%. North Carolina is expected to see even more remarkable growth, with an anticipated 152% increase in build-to-rent supply by 2025. This booming demand is driven by a variety of factors, including a robust job market, proximity to universities, and a rising number of remote workers, all highlighting a growing housing gap that currently stands at an estimated 764,478 units.

As North Carolina braces for a projected household increase of 218,160 (5%) between 2024 and 2029, the current vacancy rate for multifamily rental units is hovering around 5%, a figure considered healthy given the current rental market climate. However, whether the increase in build-to-rent homes can adequately address the housing crisis remains a crucial question for many in the community.

Deeper Dive: News & Info About This Topic

HERE Resources

North Carolina Leads in Built-to-Rent Housing Development

Additional Resources

• Charlotte Observer
• Wikipedia: Rental housing
• WSOC TV
• Google Search: Charlotte rental homes
• News Observer
• Google Scholar: real estate news Charlotte
• Axios
• Encyclopedia Britannica: Mecklenburg County