October 21, 2025

Key Market Trends and Forecasts for Successful SFR Investments: What the Data is Telling Us

As a Lennar SFR investor, staying attuned to market trends can help you identify strategic advantages and make informed, timely decisions. Understanding the intersection of supply dynamics, migration patterns and renter demographics is crucial. Here are some insights we’re seeing going into 2026.

Supply and Demand Dynamics: Tightening in Favor of Investors

Recent changes in the industry’s supply and demand balance are creating favorable conditions for SFR investors. In the U.S. rental market, the pace of new SFR deliveries has slowed after years of growth,¹ while demand continues to rise.² Research from Hunter Housing Economics shows that BTR SFR deliveries dropped from 36,910 in 2024 to 33,302 in 2025.³ And according to a recent American Community Survey, 31% of all renters live in single-family homes, which is an increase of 3.5 million renters over the past two decades.⁴

This higher demand, combined with a slower influx of new supply, is opening up new opportunities with reduced competition in core SFR markets. If you’re considering investing, now could be an opportune time.

Migration Trends: The Sunbelt and Beyond

Where should you consider investing? Population flow patterns can help identify promising regions. While the Sunbelt continues to lead in SFR investments thanks to robust population growth and stronger rent gains in cities like Atlanta and Dallas,⁵ there is now noticeable momentum spreading into the Midwest and Northeast⁶—creating some new possibilities for SFR investors.

Recent data⁷ also indicates that 203 suburbs across the U.S. 20 largest metropolitan areas are currently renter-majority. Between 2018 and 2023, the number of renter households grew faster in the suburbs compared to the main cities in five of those 20 largest metropolitan areas in the U.S.⁷ Additionally, during those five years, 15 suburbs near major urban hubs flipped from owner-dominated to renter-dominated.⁷ These shifts that can be attributed to lifestyle changes, like the desire for more space and privacy.⁷ When you invest through Lennar, you have access to new-build inventory in growth corridors across the country, including in many expanding suburban ares.

Demographic Trends: The Rise of Renters by Choice

At the heart of an SFR investment are renters—and understanding who they are is an important consideration. Studies show that a growing force in the housing market is renters by choice—those who rent for lifestyle reasons, not just necessity.⁸Research reveals that millennials and Gen Z adults make up a significant share of new rental demand as they transition into family-friendly lifestyles.⁹ Many of these young adults prefer the flexibility of renting, along with the advantages of more space and amenities without the financial burdens homeownership.¹⁰

Baby boomers also remain influential in the housing market and are increasingly drawn to the low-maintenance benefits of renting. The number of renter households in this generation is expected to grow in the coming years⁹ as they search for amenities and upkeep services that would allow them more freedom to travel, spend time with family and pursue other interests.¹¹

Markets with a balanced mix of young families and retirees—referred to as “barbell” demographics—could be especially auspicious for SFR investors, as they provide a broader base of potential stable, long-term renters.

SFR Renter Preferences: What They Value Most

Do your properties offer what renters are seeking? As the market turns increasingly toward rental living by choice, preferences—such as more space, modern finishes and quality amenities—can become essential differentiators for tenant retention and higher occupancy.

Most SFR renters prefer homes with at least three bedrooms to accommodate growing families and flexible space for the increasing number of people working remotely.¹² Renters are also attracted to high-quality finishes, energy-efficient appliances, relaxing outdoor areas and pet-friendly spaces.¹³ Fortunately, Lennar’s newly-built homes come equipped with a wide range of sought-after features, including energy-efficient designs, flexible spaces and multiple-bedroom floorplans.

Staying on top of market trends gives you valuable insight when navigating your SFR investment decisions. Armed with this knowledge and with access to our platform and selection of quality homes in high-demand markets, you’re well on your way to finding SFR opportunities with reliable and resilient returns.

Start investing today.