According to Redfin, real estate investors purchased 48.6 percent fewer homes in the first quarter of 2023 than they did a year earlier. That’s the largest annual decline on record, and outpaced the 40.7 percent drop in overall home purchases in the major metros tracked by Redfin.
Compared to the final quarter of last year, investor purchases fell 15.9 percent.
“While investors have pumped the brakes on home purchases, they’re still scooping up a bigger share of homes than they were before the pandemic, which can create challenges for individual buyers at a time when there are so few homes for sale,” said Redfin Senior Economist Sheharyar Bokhari. “Investors have gravitated toward more affordable properties due to still-high housing costs and rising mortgage rates, which has left first-time homebuyers with fewer starter homes to choose from.”
Even still, investors bought up 18 percent of homes that sold—down from a peak of 20 percent a year earlier. Overall, investors bought $27.5 billion worth of homes in the metros tracked by Redfin in the first quarter, down 46.3 percent from $51.2 billion one year earlier and down 12.4 percent from $31.4 billion one quarter earlier.
Low-priced homes made up nearly half of investor purchases in Q1, the highest share in two years. Meanwhile, mid-priced homes represented about one-quarter of investor purchases, the lowest share in two years. High-priced homes made up 27.7 percent, little changed from the prior several quarters.