Real estate investors purchased 67,943 homes in the second quarter, the highest quarterly figure on record for Redfin, according to its recent report. That’s up 15.1 percent from the first quarter and 106.7 percent from a year ago.
In dollar terms, investors bought a record $48.5 billion worth of homes in the second quarter, up from $38.9 billion in the first quarter and $20.9 year-over-year. The typical home cost $439,600, 23.7 percent higher than a year earlier, according to Redfin.
“Investors see soaring home prices as an opportunity,” Redfin Senior Economist Sheharyar Bokhari said in a release. “With housing values consistently on the rise, solid returns are pretty much guaranteed, especially when you’re an investor who has access to extremely cheap debt.”
Investor market share has nearly returned to pre-pandemic levels, as investors bought about one of every six homes (15.9 percent) purchased in the second quarter. That’s just shy of the 16.1 percent record market share they held in the first quarter of 2020, before the pandemic triggered an economic downturn.
Investors purchased 16.1 percent of single-family homes and 15.1 percent of condos sold in the second quarter, up from a pandemic low of 9.4 percent and 12.4 percent, respectively, a year earlier.
“With investors throwing money at the housing market, some homebuyers are finding it tough to compete,” Bokhari said. “Investors frequently pay with all cash, which means they often have a much higher chance of winning bidding wars than buyers who take out mortgages.”
About three-quarters (74 percent) of investor home purchases in the second quarter were all cash, the highest level since 2018.
Almost one-quarter (24.5 percent) of homes sold in the second quarter in Phoenix were purchased by investors, the highest share of the metro areas Redfin analyzed. Next came Miami (24.2 percent), Atlanta (23.6 percent), Charlotte, N.C. (22.8 percent) and Las Vegas (22.8 percent).