In dollar terms, investors bought a record
Redfin defines an investor as any institution or business that purchases residential real estate. Any "records" referenced in this release date back to the year 2000.
Investor market share has nearly returned to pre-pandemic levels. Investors bought about one of every six homes (15.9%) that were purchased in the second quarter of 2021—just shy of the 16.1% record market share they held in the first quarter of 2020, before the pandemic triggered an economic downturn.
"Investors see soaring home prices as an opportunity," said Redfin Senior Economist
Bokhari continued: "Investors are also taking advantage of surging demand in the rental market. With so many Americans priced out of homeownership, investors can turn an easy profit by buying up properties and renting them out."
The jump in activity comes after investors pressed pause on home purchases last year amid economic uncertainty, pandemic shutdowns and a soft rental market.
"With investors throwing money at the housing market, some homebuyers are finding it tough to compete," Bokhari said. "Investors frequently pay with all cash, which means they often have a much higher chance of winning bidding wars than buyers who take out mortgages."
About three-quarters (74%) of investor home purchases in the second quarter were financed with all cash—the highest level since 2018.
While multifamily buildings are the most common property type purchased by investors, investor market share in this segment has declined during the pandemic. Investors bought about one-quarter (26.5%) of the multifamily properties that sold in the second quarter, down from a peak of one-third (33.3%) in 2019.
Meanwhile, investor market share of single-family homes and condos is on the rise after dropping during the pandemic. Investors purchased 16.1% of single-family homes and 15.1% of condos that sold in the second quarter, up from a pandemic low of 9.4% and 12.4%, respectively, a year earlier.
Single-family homes have been a hot commodity during the pandemic as house hunters have prioritized space and privacy over short commute times and proximity to cities. And now, with Americans returning to the office and single-family home prices through the roof, demand for condos is on the rise after dropping during the pandemic.
Investors Have the Highest Market Share in
In recent years, investors and individual homebuyers alike have crowded into mid-sized cities that are more affordable and offer more space than major hubs like
To read the full report, including charts and a full metro-level data breakout, please visit: https://www.redfin.com/news/investor-home-purchases-q2-2021/
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