Investors Bought a Record Amount of Homes in Q3

Real estate investors kicked it up a notch in the third quarter, according to the latest data from Redfin…(Redfin)

• Real estate investors bought 18.2% of the U.S. homes that were purchased during the third quarter of 2021.

• This is up from a revised rate of 16.1% in the second quarter and 11.2% a year earlier. This equates to a 10.1% quarter-over-quarter and is a whopping 80.2% from last year.

NOTE: Single-family homes continue to be the sought-after property representing 74.4% of investor purchases in the third quarter, the highest level on record, up from 70.6% a year earlier. 

Many believe these investors are driving up prices, especially on starter homes, which is keeping many first-time homebuyers from becoming homeowners. Interestingly enough, the data does not bore that out…

• Low-priced homes represented 36.1% of investor purchases in the third quarter, a record low that’s down from 47% a year earlier.

• Mid-priced homes saw the biggest jump representing a record one-third (33%) of investor purchases, up from 20.8% in the third quarter of 2020. 

• High-priced homes made up 30.8% of investor purchases, down slightly from 32.3% a year earlier. 

Sheharyar Bokhari, Redfin Senior Economist, believes the increase in purchases of higher priced homes is bet that the COVID migration will continue…

• “Investors may also be upping their bets on pricier homes in an effort to profit from pandemic-driven migration. Affluent Americans from expensive cities have increasingly been searching for homes in places where they can get more bang for their buck—like Phoenix and Las Vegas, where investors have a heavy presence.”