As growing prices and unyieldingly high financing costs keep many other potential homebuyers from purchasing, real estate investors are grabbing a larger portion of available homes in the United States.
According to a research by real estate data company BatchData, investors purchased about 27% of all properties sold in the first three months of the year, the largest percentage in at least five years. The percentage of properties purchased by investors averaged 18.5% between 2020 and 2023.
According to the company, investors purchased 265,000 residences overall during the January–March quarter, a 1.2% rise over the same time last year. According to BatchData, the increase in the proportion of investor house purchases, despite the slight yearly gain, is more indicative of how much the housing market has slowed as regular buyers confront increasing affordability restraints.
Since early 2022, when mortgage rates started to rise from pandemic-era lows, the U.S. housing market has been seeing a decline in sales. Last year, home sales dropped to their lowest point in almost three decades.
They have been modest so far this year because high mortgage rates and steadily rising, albeit slower, property prices have deterred many potential homeowners.
Properties are taking longer to sell as house sales have stalled. Investors and other homebuyers who can afford to purchase in cash or take advantage of home equity increases to avoid paying the present mortgage rates would benefit from the much increased number of homes on the market as a result.
“As traditional buyers struggle with affordability, investors with cash and financing advantages are stepping in to maintain transaction volume,” according to the report.
Investors Make Their Mark on the Market
According to a research by real estate data company BatchData, investors purchased about 27% of all properties sold in the first three months of the year, the largest percentage in at least five years. The percentage of properties purchased by investors averaged 18.5% between 2020 and 2023.
According to the company, investors purchased 265,000 residences overall during the January–March quarter, a 1.2% rise over the same time last year.
According to BatchData, the increase in the proportion of investor house purchases, despite the slight yearly gain, is more indicative of how much the housing market has slowed as regular buyers confront increasing affordability restraints.
Since early 2022, when mortgage rates started to rise from pandemic-era lows, the U.S. housing market has been seeing a decline in sales. Last year, home sales dropped to their lowest point in almost three decades. They have been modest so far this year because high mortgage rates and steadily rising, albeit slower, property prices have deterred many potential homeowners.
Properties are taking longer to sell as house sales have stalled. Investors and other homebuyers who can afford to purchase in cash or take advantage of home equity increases to avoid paying the present mortgage rates would benefit from the much increased number of homes on the market as a result.
“As traditional buyers struggle with affordability, investors with cash and financing advantages are stepping in to maintain transaction volume,” according to the report.
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