Northmarq’s latest report on the Build-to-Rent sector predicts uneven performance in 2023 due to increasing vacancy rates as deliveries outpace market absorption. The tight capital market is causing developers to focus on finishing existing projects while delaying new developments. However, the long-term outlook for the sector remains favorable as the labor market performs well and high single-family home prices deter potential first-time buyers. Renter demand is expected to support rent growth, despite a 35% premium on Build-to-Rent units compared to traditional apartments. Construction financing is becoming more challenging to obtain, particularly from regional banks, and investment activity has slowed. Phoenix leads the Build-to-Rent construction market with nearly 6,000 units in its pipeline.