WRE News August 17, 2024
Buyer
Investor purchases of homes shout up by 3.4% year-over-year in the second quarter, according to new data from Redfin (NASDAQ: RDFN). This marked the largest increase since the second quarter of 2022.
Investors acquired $43 billion worth of homes in the second quarter, up 13.7% from a year earlier. This also marked the biggest gain in two years. Investors bought 16.8% of homes that sold in the second quarter, which is the highest second-quarter share on record aside from 2022.
Investors are also reaping profits when they flip their purchased properties. The typical home sold by an investor in June went for 58% more ($190,404) than the investor bought it for. Only 5% of homes sold by investors resulted in a seller’s loss.
San Jose and Las Vegas recorded 27% year-over-year increases in investor home purchases during the second quarter, the biggest jump among the metros Redfin analyzed. Next came three more California metros: Sacramento (18.9%), Los Angeles (17.9%) and San Francisco (17.8%).
Redfin stated the latest data showed investor activity in the housing market has stabilized after more than doubling during the pandemic homebuying boom in 2021 before plummeting by 50% last year amid rents and home values.
“One reason real estate investors are coming out of hibernation is to take advantage of robust demand from renters,” said Redfin Senior Economist Sheharyar Bokhari. “Elevated home prices and mortgage rates have pushed homeownership out of reach for a lot of Americans, which is fueling demand for rentals. Investors, many of whom can afford to pay in cash to avoid the sting of high mortgage rates, are cashing in on that demand.”
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