Single-family rental fundamentals have remained solid during the first half of the year, with increases seen in all 50 of the nation's largest metropolitan areas and investor activity continuing to rebound, according to Arbor's Q2 sector investment trends report.
The report found national single-family rents rose 2.6% year-over-year in April, marking the first acceleration in annual growth since late 2023. Providence led the nation with acceleration of 8.3%, followed by Buffalo at 5.9% and Milwaukee at 5.7%.
While rent growth remained strongest across parts of the Northeast and Midwest, all 50 major metros posted annual gains, Arbor said. Several Sun Belt markets continued to trail the national average, including Austin and Dallas, where just 0.2% year-over-year increases were seen.
Demand for single-family rentals remained supported by persistent affordability challenges in the for-sale housing market. According to the report, the median U.S. household would need to devote 42% of its income to housing payments to purchase a home, limiting renter-to-owner transitions and helping keep occupancy levels stable.
Single-family rental occupancy averaged 93.9% during the first quarter, essentially in line with pre-pandemic norms and slightly above year-ago levels.
Investment activity also continued to improve. Publicly traded single-family rental REITs recorded $900 million in net acquisitions during the fourth quarter of 2025, their strongest quarterly acquisition activity since 2022. Arbor said the increase suggests institutional investors have largely moved beyond the retrenchment that followed the sector's repricing in 2022.
Structured finance markets remained active as well. Approximately $2.5 billion in single-family rental CMBS issuance was recorded through mid-May, putting the sector on pace to exceed last year's issuance volume.
At the same time, the asset class continues to adjust to a higher-rate environment. Single-family rental cap rates rose 19 basis points in the first quarter to 7.4%, marking the 10th consecutive quarterly increase. Since late 2021, cap rates have expanded by roughly 210 basis points as valuations reset and income yields improved.
Build-to-rent construction moderated from record levels reached in 2024 but remained historically elevated, with roughly 68,000 units started during the year ending in the fourth quarter of 2025.
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