Redfin: Investor Home Purchases Post Biggest Increase Since Q2 2022

(Image courtesy of Redfin)

Investor purchases of homes were up 3.4% year-over-year in Q2, per Redfin, Seattle.

That’s the largest uptick in investor home purchases since the second quarter of 2022.

Investors purchased a total of $43 billion in homes in Q2, up 13.7% year-over-year. In all, they bought 16.8% of U.S. homes sold in the second quarter–the highest second-quarter share on record.

“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.”

While investor purchases were up 3.4%, that contrasts with a 1.9% drop in overall home purchases.

One reason investors are less sensitive to rate fluctuations is that they’re more likely to purchase homes in cash, at 69%.

Looking specifically at single-family homes, investor purchases rose 6.7% year-over-year. But, investor purchases of multifamily properties fell 5%; investor purchases of condos/co-ops fell 3.3%; and investor purchases of townhomes fell 1.9%.

By type, 24.1% of low-priced U.S. homes that sold in the second quarter were purchased by investors, up from 22.7% a year earlier. Investors also bought 14.7% of high priced homes and 12.1% of mid-priced homes that sold in the period.

Additionally, the typical home sold by an investor in June was sold for 58% more than the investor bought it for, down from 62.1% a year earlier.

Five percent homes sold by investors sold for a loss.

The places with the largest uptick in investor purchases were San Jose, Calif., and Las Vegas, both up 27%. Those were followed by Sacramento (up 18.9%); Los Angeles (up 17.9%) and San Francisco (up 17.8%).