Open House is our monthly newsletter focused on the data, trends, and market dynamics shaping today’s single-family rental (SFR) industry. Each edition examines the factors influencing housing supply, affordability, and development activity, while highlighting the broader trends impacting the housing market.
This month, we’re examining the role construction lending can play in expanding housing supply nationwide. The U.S. continues to face a significant housing shortage and addressing it will require a range of solutions. Builders need reliable access to financing to move projects forward, particularly in markets experiencing strong demand and limited supply. To help address this need, we launched our developer lending program last year as part of our ongoing efforts to support new housing supply in high-demand markets.
To date, our developer lending program has supported the development of more than 1,000 homes nationwide. We have also set a goal of originating approximately $400 million for new construction loans in 2026 and have already closed more than $250 million of total loan commitments to developers since the program launched last year. Most recently, we partnered with TWO Capital Partners and Origin Investments to finance the construction of a 199-unit build-to-rent community in Madison, Tennessee.
In January, we took another step to support housing development through our acquisition of ResiBuilt , a leading build-to-rent (“BTR”) developer operating across the southeastern United States. This acquisition reflects our continued focus on expanding housing supply and supporting development in high-growth markets.
Together, these efforts reflect our continued focus on expanding housing supply in markets with strong demand. The data below highlights the importance of increasing housing supply to help address the nation’s housing shortage.
Supporting Research
In 2025, Goldman Sachs found that 3-4 million homes beyond normal construction would need to be built in the U.S. to address the housing shortage and boost affordability.
The number of single-family homes under construction declined to 587,000 units in 2025 , an 8.4% decrease from the previous year and the lowest level since November 2020.
According to the National Association of Home Builders Acquisition, Development and Construction (AD&C) Financing Survey, builders and developers reported continued tightening credit conditions during the fourth quarter of 2025.
Recent Financing Constraints Limit Housing Development
Despite strong demand for increased housing supply, traditional sources of financing have retreated from the housing sector, and loan rates have increased in recent years. The combined impact of this effect and rising construction costs has created an unstable financing environment for home builders, leading to project delays and volatile home prices.
Construction loan rates have increased over the past couple of years to an average rate of 7-10% .
65% of home builders anticipated that interest rates would remain a significant challenge for the industry in 2026.
70% of builders report challenges with pricing homes due to uncertainty about material costs.
Advantages of Construction Lending Programs
Construction lending programs can provide important advantages in today’s housing development environment by accelerating access to capital, simplifying the financing process, and supporting projects that may not meet traditional bank criteria. In a market where timing, flexibility, and execution certainty directly affect project viability, these programs can help developers maintain project momentum, manage costs, and pursue opportunities across both core and undersupplied markets.
Private lenders can process loans faster than traditional banks , reducing delays in permitting and contractor mobilization.
Unlike traditional banks, construction lenders can focus more on asset value and project viability rather than rigid borrower criteria, allowing for customized loan structures and streamlined approvals. This flexibility is especially valuable for complex or time-sensitive developments.
Construction lending programs can help identify and increase investments in underserved markets that traditional financing mechanisms have overlooked.
By aligning capital with areas of greatest need, construction lending can play an important role in addressing the nation’s housing shortage. Expanding access to financing for new development will remain important for increasing housing availability and improving affordability nationwide. Invitation Homes will continue partnering with developers, particularly in undersupplied, high-growth markets, to help support additional housing supply.
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