Investors up their buying share of single-family homes in Q2 2021. Investors bought nearly 70,000 homes in Q2, according to Redfin.
Investors Upped Their Ante in Single-Family Market in Q2 2021
Like catnip lures cats from out wherever they happen to be, extreme home price growth has lured investors from the sidelines to actively participate in the single-family home market.
During Q2 2021, according to Redfin, investors purchased 67,963 single family homes during Q2 2021, a substantial uptick from 59,017 in Q1 2021. These figures represent an increase from 14.8% of investor owned units in Q1 of to 15.8% investor owner units of all US properties. In dollars and cents, investors poured a total of $48.5B into the single-family homes during Q2 2021.
Rising Housing Values = Strong Returns
Rising housing values “encouraged” investors to open their wallets to the US single-family home market during Q2 2021.
Take a look a dollar amounts investors have plunked into single-family homes over the past couple of years:
2Q 2020 1Q 2021 2Q 2021
Total Purchases 32,873 59,017 67.943
Purchase Amount $20.9B $38.9B $48.5B
Investor Market 10.2% 14.8% 15.9%
Having Access to Cheap Debt Helps Investors, Hurts Individuals
According to this latest Redfin report on investor presence in the single-family home market during Q2 2021, many investors had the advantage over individual buyers by having access to cheap credit.
74% of investments in the single-family home market in Q2 2021 were cash purchases. Sheharyar Bokhari, Redfin’s senior economist, said, “With investors throwing money at the housing market, some home buyers are finding it tough to compete. Investors frequently pay with all cash, which means they often have a much higher chance of winning bidding wars that buyers who take out mortgages.”
Home Types Investors Bought in Q2 2021
Here are the home types investors bought during Q2:
- 26% multifamily homes
- 1% single-family homes
- 1% condominiums
- 2% of lower-priced properties
- 8% of mid-priced properties
- 5% of high-priced properties
Bokhari said, “Investors are 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.”
Thanks to Redfin and National Mortgage News.