After a sluggish start in 2025, the build-to-rent sector has found its footing again. Northmarq's latest BTR report shows that investors returned to the space in the second half of the year as interest-rate pressures eased and economic momentum strengthened.
While total transactions still trailed 2024's pace, renewed confidence in the single-family rental model—particularly in the Southeast—helped activity rebound and set the stage for steadier growth heading into 2026.
Regionally, the Southeast led the nation in transaction volume, accounting for roughly half of total dollar activity. More than $1.1 billion in BTR properties changed hands across Florida, North Carolina and Tennessee. Activity in Florida was spread across multiple markets, while in North Carolina, sales were concentrated primarily in Charlotte, followed by Raleigh-Durham. In Tennessee, deals were split fairly evenly between Nashville and Knoxville.
Overall, the Southeast represented about 20% of total BTR transactions nationwide, ranking second in deal count behind the Phoenix area, which led the country with nearly 1,500 units selling for more than $500 million.
The Midwest accounted for roughly 12% of BTR activity in 2025, with transactions in Iowa, Minnesota, Kansas and surrounding states. Northmarq reported that sector properties in the Midwest typically sold at premiums over traditional apartments, with a median per-unit price approaching $380,000 — more than double the regional median for conventional apartment properties.
The report also highlighted a structural shift in transactions. While fully leased-up communities dominated sales in previous years, rolling options and phased takedowns of completed units are now representing a growing share of deals, reflecting an increasing role for homebuilders in the BTR sector.
Pricing trends in 2025 showed modest gains. The median per-unit price across the sector was roughly $276,000, up from $270,100 in 2024, following a peak above $300,000 in 2022.
Townhomes, which represent the bulk of transactions, sold for a median of $272,000 per unit, down from $285,000 in 2024. Larger single-family detached homes commanded slightly higher prices, topping $287,000 per unit, with the highest activity in Arizona, Texas, Tennessee and Arkansas.
Meanwhile, horizontal apartments and cottages, once a dominant BTR product, slowed in 2025, representing about 10% of the transaction mix, with a median price near $255,000 per unit.
Cap rates for BTR averaged 5.5%, with townhome properties posting the lowest average. Northmarq noted that operators continue to focus on managing operating costs, which makes these assets especially attractive to buyers seeking low-maintenance investments. Cap rates were largely unchanged from the second half of 2024 but remain roughly 150 basis points above the levels seen at the market peak a few years ago.
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