Investors clearly think now is not an ideal time to be buying more properties. According to new numbers out from Redfin, investor purchases declined 45 percent annually in Q2 of 2023—the biggest decline since 2008 with the exception of the quarter before, when they dropped 48 percent.
Investors bought a total of $36.4 billion worth of homes in the second quarter.
Real estate investors bought roughly 50,000 U.S. homes in the second quarter, the fewest of any second quarter in seven years, with the exception of the start of the pandemic. Investors are also making up a smaller share of the home-selling pie, with just 8 percent of new listings owned by investors, down from a peak of 13 percent at the end of 2021.
“Moving forward, the investors who do come back may be more focused on scooping up rental properties than flipping homes,” said Redfin Senior Economist Sheharyar Bokhari. “All signs point to the rental market remaining relatively strong. Home prices and mortgage rates are high enough to motivate would-be first-time homebuyers to continue renting. The typical U.S. asking rent remains quite high, just $16 shy of its all-time high, so investors who are landlords stand to earn money. Investor purchases of rental properties could be limited by some of them building new properties to rent out, though.”
The typical home flipper who sold a home in June sold for 61 percent ($188,448) more than their initial purchase price—down from a 69 percent ($199,946) premium a year earlier.