Realtor.com says investors pulled back on home buying activity over the last couple of years, however, according to their new report, investor share has grown despite purchasing fewer homes. To get their data they looked at deed records dating from January 2000 to March 2024 nationally and in the 150 largest US metros. They included only single family homes, condos, townhomes and row houses and excluded multi-family buildings which is not a market the typical homebuyer is competitive in.
In 2023, investor activity fell to 13.1% of home purchases, down from 13.8% in 2022. Home prices and mortgage rates remained elevated through the year, taking some of the wind out of investors’ sails. However, 2023 still saw the second highest share of investor purchases in the data’s history (back to 2001).
Though the share of investor buyers fell less than 1 percentage point, the number of investor transactions fell 25.3% year-over-year in 2023, outpacing the 20.4% drop in non-investor home purchases in the year. As the housing market got more challenging, investors pulled back more quickly than non-investor homebuyers.
Some key points:
- Investors accounted for 14.8% of home purchases in Q1 2024 – the highest share in the data’s history.
- The number of investor purchases fell slightly annually, clocking in at the lowest level since 2020, but still exceeded pre-pandemic highs, topping 2019-Q1 by 10.6%.
- Though more non-investors are purchasing in all cash, investor cash-purchase activity fell annually in the first quarter as all investors expanded their use of debt financing and as the mix of investor buyers shifted to small and medium investors, who are somewhat more likely to use debt over cash.
- Small investors made up 62.6% of investor purchases, the highest small investor share in the data’s history (back to 2001). Small investors bought 6.4% more properties on an annual basis, while medium and large investor purchase counts fell 3.8% and 13.9%, respectively.
- Metros in the Midwest and the South saw a high and growing share of investors.
Click here to read the full report at Realtor.com.
