JLM Living Highlights How Build-to-Rent is Transforming into an Institutional Asset Class as a Key Solution to the U.S. Housing Crisis

DALLAS, TX – October 1, 2025

JLM Living, a national leader in the development of purpose-built rental communities, today released a market analysis detailing how the build-to-rent (BTR) sector continues to gain significant traction as a solution to the ongoing U.S. housing shortage. The analysis underscores how sustained market forces are accelerating BTR’s transition into a stable and highly attractive institutional asset class. 

The analysis identifies several key factors driving unprecedented demand for BTR products: 

• Affordability Crisis Locks Out Would-Be Homebuyers: Elevated interest rates continue to create a significant barrier to entry for prospective homeowners. For the cost of purchasing a home versus renting to return to its historical norm, mortgage rates would need to fall to approximately 3.0%, a level far below today’s market. This has sent a wave of would-be buyers into the rental market. 

• Demographic and Generational Shifts: The largest U.S. generation, millennials, are now entering their prime household formation years. However, due to prohibitive housing costs, they are increasingly unable to purchase single-family homes, creating a massive pool of renters who desire the space and privacy a traditional apartment cannot provide. The number of first-time homebuyers is currently at a 20-year low. 

• The Rise of “Renters by Choice”: A growing segment of the population is choosing to rent due to a preference for a maintenance-free lifestyle and a desire to avoid the financial and time burden of homeownership. This demographic shift further accelerates the absorption of high-quality rental units. 

• Shrinking Rental Supply: The supply of new rental units continues to dwindle, with multifamily housing starts down more than 12% year-over-year, following a significant 28% drop in 2024. This supply constraint, paired with surging demand, creates a powerful market imbalance that BTR is uniquely positioned to address. 

The Build-to-Rent Advantage: A Solution for the Market and a Draw for Institutions 

The confluence of these factors has solidified BTR as a compelling solution for the market and a stable investment vehicle for institutions. 

“The current housing market dynamics are not temporary shifts; they are a fundamental realignment of consumer preferences and financial realities,” said Larry Meyer, Co-Founder & Chairman at JLM Living. “Build-to-rent communities are the ideal product to meet this demand, offering the space and feel of a traditional home with the flexibility of renting. This is why we’re seeing an unprecedented level of institutional capital flowing into this sector.” 

Key indicators benefiting the BTR sector include: 

• Surging Rental Absorption: Rental demand remains exceptionally strong, with approximately 1.5 multifamily units being absorbed for every new unit starting construction. 

• Homebuilder Market Challenges: As elevated interest rates and affordability issues persist, homebuilders are facing declining sales. Many are now offering significant incentives, with some, like Lennar, reportedly offering discounts of up to 13.3% to attract buyers. This market pressure is leading builders to pivot towards BTR developers like JLM Living, who can provide consistent project pipelines and sustainable margins. 

• Resident Preference and High Occupancy: Renters consistently show a strong preference for BTR products over traditional Class A apartments due to sought-after features like private backyards, no shared walls, and smart home technology. This preference has been proven by the sector’s impressive sustained occupancy rates, which have held at around 95% over the past few years. 

• Institutional Validation: The BTR sector’s stability and growth potential have attracted major institutional investors, including JP Morgan, Blackstone, and Pretium, who are making significant investments in the space. Their entry into the market validates BTR as a resilient and high-yield asset class. 

JLM Living is dedicated to creating meticulously designed build-to-rent communities across the nation. By focusing on strategic locations and amenity-rich designs, the company aims to provide exceptional living experiences for residents while generating attractive, long-term returns for investors. 

Contact: 

Ryan Sloan
Director of Finance & Operations
Ryan@jlmliving.com
214-831-2002