Phoenix is emerging as a leading market for build-to-rent and single-family rentals, driven by a structural shift where it is now more affordable to rent a home than to buy one in many parts of the metro area. This affordability gap is extending the renter lifecycle and creating durable demand for professionally managed rental homes, positioning the city as one of the country’s most compelling plays for long-term investors in the sector.
Population growth fuels demand.
Phoenix is entering a new phase of residential growth fueled by sustained population inflows and long-term renter demand. According to the U.S. Census Bureau’s Population Estimates, the Phoenix–Mesa–Chandler metropolitan area added approximately 59,000 residents between 2024 and 2025, bringing its population to more than 5.2 million. This steady influx creates ongoing housing needs across various price points and life stages.
Seth Johnson, director of growth at Atlas Real Estate, tells GlobeSt.com that the city continues to attract long-term rental demand because its growth drivers are structural rather than temporary. Johnson noted that the city’s diversification, employment growth, and relatively attainable living costs compared to coastal markets contribute to this stability.
“This demand will remain durable because Phoenix continues to diversify its economy while offering employment growth, relatively attainable living costs compared with many coastal markets, desirable suburban communities and a high quality of life,” Johnson said. “Growth may normalize from the extraordinary pace seen during the pandemic, but the long-term fundamentals supporting rental housing remain intact.”
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Mortgage rates keep buyers on the sidelines
Freddie Mac’s Primary Mortgage Market Survey indicates that mortgage rates remain well above historically low levels from the last decade. Higher home prices, insurance costs, and larger down payment requirements are causing many financially qualified households to delay purchasing a home.
Realtor.com recently ranked Phoenix third among major U.S. metros where renting is more affordable than buying. In Phoenix, owning a starter home costs nearly $1,200 more per month than renting a comparable property, a gap that is extending the renter lifecycle across a broad range of demographics.
“Today’s renter is often not choosing between an apartment and homeownership,” Johnson said. “They’re choosing between owning a house and renting one. Single-family rental homes and professionally managed build-to-rent communities provide the space, privacy, yard, garage and neighborhood environment many households want while allowing them to maintain financial flexibility.”
Johnson added that many residents are delaying homeownership not because they cannot qualify, but because they want more certainty around interest rates, long-term employment, or personal financial goals. That hesitation continues to support demand for professionally managed single-family rental housing.
This trend mirrors the post-2008 era when stricter lending standards and higher interest rates forced many households to rent longer. In those years, the rental market saw a wave of institutional investors snapping up single-family homes to rent out, creating a precedent for the current cycle. However, unlike the previous boom, the current influx of residents is being absorbed by a pipeline of new development, keeping the market from overheating.
Suburban growth draws capital
Johnson noted that Phoenix offers characteristics institutional investors and developers seek: consistent population growth, expanding employment, available suburban land, strong household formation, and demand for larger rental homes. The Valley’s suburban growth pattern has naturally supported this housing model, with communities in the West Valley and Southeast Valley attracting families and professionals.
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Yardi Matrix research ranks Phoenix among the nation’s leading markets for build-to-rent activity. As the market matures, investors are becoming increasingly selective, focusing on execution rather than just market entry.
“At the same time, investors are becoming increasingly selective,” Johnson said. “With one of the country’s largest development pipelines, success depends on choosing the right locations, delivering the right product and pricing homes appropriately. Long-term confidence in Phoenix remains strong, but disciplined execution matters more than ever.”
Specific submarkets lead the way
Several suburban growth corridors are drawing the most capital, including Buckeye, Goodyear, Surprise, Queen Creek, Gilbert, Chandler, and parts of Mesa. Buckeye and Goodyear attract households seeking newer housing and relatively attainable monthly costs. Surprise remains popular with families and professionals looking for suburban amenities and additional space.
Queen Creek, Gilbert, and Chandler are benefiting from employment growth, highly regarded schools, and strong community infrastructure. Johnson said institutional capital is increasingly focused on submarket fundamentals rather than investing in Phoenix as a whole.
“Investors are evaluating school districts, transportation access, employment growth, competing housing supply and long-term demographic trends before allocating capital,” Johnson said. For build-to-rent and single-family rental investors, that submarket-level discipline, combined with Phoenix’s structural growth drivers and pronounced rent-versus-own affordability gap, is shaping one of the most compelling long-term rental housing stories in the Sun Belt today.
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