Investors threw more cash into the housing market in the second quarter as consumers continued to pull back.
The $43 billion they spent was also up 13.7% from the same time last year, the largest annual rise in two years. Investors retained a strong appetite for low-priced homes, accounting for nearly 1 in every 4 such property purchases last quarter. Redfin defines low-priced homes as those in the bottom third of local sales prices.
Businesses used cash in 69% of their purchases, ignoring the impact of
The second quarter results represent a bounceback for investors whose market share fell nearly 50% last year, after companies flooded the housing market during the recent origination boom. The new activity is boosted by increased rental demand, said Sheharyar Bokhari, senior economist at Redfin.
"Elevated home prices and mortgage rates have pushed homeownership out of reach for a lot of Americans, which is fueling demand for rentals," he said in a press release.
A pricey rental market is showing signs of cooling as a building boom
Redfin also found investors on average netting six-figure profits for homes sold in June. The businesses sold properties for 58% more, or $190,404, than the price they bought that home for. Only 5% of investors sold homes at a loss during the spring.
Investors saw massive profits in Philadelphia, where their typical home sold more than 133% of its original purchase price, Redfin said. The lowest turnaround among the over three dozen major metros the brokerage analyzed was in Phoenix, where investors saw a typical 37.2% gain.
Miami was the most popular metro for investors in the second quarter, as businesses scooped up 28.2% of homes in the second quarter. Las Vegas and Southern California metros made up the remaining top investor markets.
Two Florida markets meanwhile were among the areas where investors pulled back the most: Fort Lauderdale (-15.9%), and Miami (-11.3%).
Investors shied away from Providence, Rhode Island, making up just 8.5% of home purchases in the second quarter. That made the city the slowest for investors in the second quarter ahead of Washington, D.C., and other northern markets.
