In the first quarter of 2024, real estate investors purchased approximately 44,000 homes, a 0.5% increase from the same period last year.
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A new report shows that investor home purchases climbed in the first quarter of 2024, the first increase in two years.
A report released by Redfin on Thursday showed that real estate investors purchased about 44,000 homes in the first quarter of 2024, which was only a 0.5% increase from the first quarter of 2023, but the most investor purchases since the first quarter of 2022. Volume showed annual growth for the first time.
Overall, investors purchased 19% of all homes sold in the first quarter, the highest share in nearly two years and up from 17.9% a year ago, Redfin data shows. The ratio is still lower than the market during the pandemic, but still high compared to pre-pandemic years.
Redfin said the growth was largely due to investors making more money than a year ago. The typical home sold by investors in March 2024 was 55% higher than the purchase price, up from 46.3% in March 2023. The home is purchased for 55% more than when purchased.
“Investor activity is steady,” Connie Durnal, a broker at Redfin Premier in Dallas, said in a report. “When housing prices went crazy high during the pandemic, investors sold off. But a few months ago, they started to pick up. I don’t see a lot of speculators in our market, but there are a lot of investors looking for rental units. single-family homes, which are in short supply.
The report found that investors purchased more single-family homes than any other property type. Investor purchases of single-family homes increased 3.9% annually in the first quarter, the first annual increase in nearly two years, while investor purchases of townhomes, condos/co-ops and multifamily properties increased 3.9% year over year from 2023. Quarterly decline of 8.6% The report believes that investor purchases of single-family homes remain strong due to strong rental growth in the industry, which means higher returns on investment.
Single-family homes accounted for 68.9% of investor purchases in the first quarter, the highest share since mid-2022. Condominiums and co-ops accounted for 18.7% of purchases, townhomes accounted for 7.2%, and multifamily units accounted for 5.3% — all lower than a year ago.
Rising home prices are also affecting investors, who are paying more to buy a home than they were just a few years ago. The report said the typical home price purchased by investors in the first quarter was $464,560, up 9.2% from the same period last year.
The California market has the largest increase in investor activity. San Jose’s investor home purchases increased by 27.8% year-on-year, and Oakland’s grew by 22%, followed by Minneapolis, Sacramento and San Francisco, which grew by 21.6%, 20.1% and 18.5% respectively. .
Purchases fell sharply in relatively affordable markets, down 22.1% in Cincinnati, 22% in Baltimore and 20.2% in Providence, Rhode Island.
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