according to Recent analysis by Redfin, real estate investors purchased 26.1% of affordable homes sold in the fourth quarter of 2023, the highest share ever. To find its results, Redfin analyzed home purchase records in counties across 39 of the most populous metropolitan areas in the United States. They divide home buying into three categories: low price range, medium price range, and high price range. Affordable homes are homes that fall in the bottom tertile of local sales prices, medium-priced homes are homes that are in the middle tertile, and high-priced homes are homes that are in the top tertile.
Some important points:
- Rising house prices and mortgage rates, along with stagnant rents, are making affordable housing increasingly attractive to investors.
- Investors bought 18% of homes sold in the fourth quarter, up slightly from the same period last year.
- Overall, investor home purchases fell 11% year-on-year, the smallest decline since the decline began in 2022.
“Investors are attracted to affordable housing for the same reasons other home buyers are: low prices, especially when home prices and borrowing costs remain high.” When prices become this tight, there may be an increased chance that the value of the lower price range will increase, which means greater potential for wealth creation. ”
Click here to read Redfin’s full report.
