TAMPA, FL (WFLA) — The number of homes bought by investors fell nearly 20% in the first quarter of 2022. Redfin, real estate company and analyst, said number the volume of investor purchases in their 10 largest subways has declined.
“Real estate investors bought 77,829 Redfin-tracked subway homes in Q1, down 11.5% from Q4 2021 and down 16.5% from Q3 2021. when investor buying reached an all-time high,” the report said. “YoY, investor purchases are up 30.7% — the smallest annual increase in a year.”
Tampa ranked in the top 10 with 24.7% of investor purchases of residential real estate. However, according to Redfin, the market saw a 13% drop in purchases compared to the last quarter.
Despite the drop, Redfin said investors are still buying one in five homes sold in US markets. The company said investors bought more homes as home purchases fell across the country as a whole, which “allowed investors to increase their market share even while buying fewer homes.” “.
Redfin defines an investor home purchase as any home or residential property purchased by an institution or business.
“Investor home purchases are falling for the same reason as general home purchases: rising interest rates and high home prices have made getting a mortgage and buying a home more expensive,” said Sheharyar Bohari, senior economist at Redfin. “While roughly three-quarters of investor purchases are made with cash, investors are still affected by interest rates because they often take out loans to get that money.”
Bohari said about 75% of all investor purchases are made in cash, but purchases are falling “for the same reason”: all home purchases have fallen, higher interest rates and higher home prices. Still, he says, investors can buy homes even at higher rates, meaning they “don’t feel the pain of higher interest rates as much as individual buyers, many of whom are being squeezed out of the housing market altogether.”
Investor purchases of residential real estate in the first three months of 2022 totaled almost $50 billion, according to Redfin. The company said it was down 6.8% from the previous quarter, but still up 40.3% from a year earlier.
Redfin said this is the second consecutive quarter that investor buying has fallen, after their data showed that investor buying hit an all-time high at the end of 2021. Part of their ongoing home buying may be due to the hot rental market, according to Redfin.
“While investor buying has slowed, it remains above pre-pandemic levels, in part because investors are able to rent out homes and profit from skyrocketing rents,” Redfin said. “Demand for rent is high because there aren’t enough homes to sell, and those for sale are often prohibitively expensive.”
Here’s Redfin’s breakdown of the top 10 metros and how investor buying has changed in 2022.
|underground||Share of houses bought by investors||Change from the previous quarter|
|Charlotte, North Carolina||32.2%||-19.1%|
|Las Vegas, Nevada.||26.8%||-16.5%|