#USA #Phoenix #BTR #Cavan Companies #Midwest Rental

Midwest Rental Markets Thriving

Recent data from Cavan Research highlights an evolving landscape in the rental market, particularly within the Midwest, as this region's build-to-rent (BTR) markets appear to be outpacing those in the oversupplied Sun Belt areas. The findings emerge as the U.S. House of Representatives approaches a crucial vote on a modified version of the 21st Century ROAD to Housing Act. This revised legislation aims to fully protect designated rental communities by eliminating potentially detrimental Senate provisions pertaining to forced dispositions.

According to the research, the Midwest is continuously experiencing positive rent growth, establishing a stark contrast to some Sun Belt submarkets that are grappling with high levels of new supply. The current national average for BTR occupancy stands impressively at around 90%, indicating a resilient market despite negligible rent growth nationwide.

Norm Miller, the CEO of Cavan Companies, remarked on the status of the market, saying, "The national headlines often portray a one-size-fits-all scenario which does not cater to the diverse conditions present in various regions. Certain markets are still navigating through peak-cycle supply, while others have maintained stable growth. This discrepancy leads to unique operational environments that vary significantly across regions."

Key Insights from Build-to-Rent Research

Among the standout findings presented in the Build-to-Rent 2026 report, several important trends are clear:

1. Midwest's Construction Contribution: As of early 2026, the Midwest accounts for about 13% of BTR units under construction nationally. In stark contrast, the Phoenix market alone resembles the entirety of the Midwest in terms of ongoing developments.

2. Changing Attitudes Towards Renting: Approximately 36% of BTR residents classify themselves as renters by choice, illustrating a significant shift in consumer behavior that has emerged in recent years.

3. Investment Allocations: Family offices are increasingly recognizing real estate's value, committing roughly 13% of their portfolio assets to this sector, marking it as one of their top three asset classes.

4. Value of Purpose-Built Communities: BTR communities command a rent premium of about 15-20% over comparable multifamily units in select markets, largely due to their unique features such as reduced turnover rates, the inclusion of private yards, and strong resident retention metrics.

Operational Economics and Regulatory Factors

The report delves into the operational economics linked with low-density rental units, alongside tax advantages available to new construction assets. Additionally, it underscores an increasing regulatory clarity differentiating purpose-built BTR facilities from scattered-site single-family rentals, a distinction that impacts market performance significantly.

Cavan Companies has established itself as a leading developer and operator in the BTR sector, recognized as one of the five largest developers based on units under construction by late 2025, according to RealPage Market Analytics. The potential for continued growth in the Midwest is further illustrated in their executive summaries, emphasizing the importance of distinct market characteristics.

For those interested in further exploring these insights, the executive summary of the findings can be accessed via Cavan Companies' official site, and media representatives can request the complete report directly from the firm.

About Cavan Companies and Cavan Research

Founded over 50 years ago, Cavan Companies has positioned itself as a comprehensive developer and operator of purpose-built BTR communities, marked by their signature brand, The Bungalows. Their dedication to research and innovation in the housing sector is reflected in Cavan Research, which provides data-driven insights into housing trends and strategies for institutional real estate.

As legislative changes unfold and market conditions evolve, the Midwest's BTR markets appear to be a beacon of growth and stability, indicating robust opportunities for investors and renters alike in the coming years.