A new report from Redfin says that investor purchases of U.S. homes fell a record 45.8% year over year in Q4 2022. They said the high cost of borrowing money and the prospect of substantial home-price declines have made real estate investing less attractive. In addition, they point out that the 2nd biggest decline on record occurred in 2008, when investor purchases slumped 45.1% during the subprime mortgage crisis.
Some key points:
- Investor home purchases fell a record 46% year over year in the fourth quarter.
- Investors bought 18% of homes that sold, down from 19% a year earlier.
- Pandemic boomtowns Las Vegas and Phoenix saw investor purchases fall over 60% – more than all of the other metros Redfin analyzed.
- Investors pulled back from single-family homes more than condos and townhomes, and high-priced properties more than low-priced properties.
“It’s possible that investors will start to wade back into the market this year given that mortgage rates have ticked down from their 2022 high – especially if home prices show signs of bottoming…But it’s unlikely that investors will return with the same vigor they had in 2021…” Said Redfin Senior Economist Sheharyar Bokhari.
Click here to read the full report at Redfin.com.