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Where Are Investors Buying? [Real Estate Training]

Investors bought more than 18% of all homes sold in the US during Q3 2021.

It’s No Secret that Investors Winning More & More Houses

As we’ve written, investors have been more active in the single-family home market than ever before. During Q3 2021, investors purchased +18.2% of all homes sold in the US for a total of approximately $64B. This is the highest investor share and the largest dollar amount of any other quarter on record, according to a newly released report by Redfin.

In Q3 2000, investors purchased approximately 6% of available single-family homes; during pre-pandemic 2020, investors bought about 16.6% of for-sale homes. in Q3 2021,, investors took hold of 18.2% of all homes sold.

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Redfin’s Chief Economist Daryl Fairweather said, “Investors have the advantage (over individual buyers) because they usually come with cash. They are usually willing to waive inspections. An investor is able to offer terms that are more favorable than an owner occupant.”

Investors Bought More Expensive Single-Family Homes in Q3 2021

The average investor home purchase in Q3 cost $438,770. A year earlier, investors spent -5% less on an average single-family home purchase. Clearly, investors are profiting more by being able to charge higher rents to middle-class earners who would have, in another time period, had an easier time of buying those homes themselves.

Fairweather said, “the people who own homes these days have very good credit. They’re putting a lot of money down, and people who don’t have that are being shut out. That creates an opportunity for investors to buy homes and rent them back to the very people (who) would have wanted to buy them.”