Steady Investor Share In U.S. Home Sales This Summer

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Steady Investor Share In U.S. Home Sales This Summer

Aug 25, 2023 | News | 0 comments

A recent report by CoreLogic’s Economist Thomas Malone reveals that U.S. home investor shares remained stable in early summer 2023. While investor activity surged in 2021 with a consistent 8% higher market share than in 2020, it has slightly decreased this year. However, investor purchases are unlikely to return to pre-pandemic levels, with seasonal factors affecting the recent dip.

Between April and June 2023, home investors acquired 85,000, 98,000, and 82,000 properties, showing a quarterly drop of 90,000 purchases. Yet, in contrast to 2019, investor activity surged by 43,000. This divergence highlights a shifted market compared to the past, as non-investors bought 392,000 fewer homes in Q2 2023 than in Q2 2019.

Additionally, as overall investor purchases decrease, smaller investors are taking on a larger share of the market. Both “mega” and “large” investors held shares ranging from 8-10%. Notably, mega-investors dropped significantly from their peak at 17% of purchases in June 2022. Medium investors (owning 10 to 99 properties) slightly decreased from 37% to 35%. Regular housing investors are increasingly favoring smaller scales (3 to 9 properties). In June, this group comprised 47% of purchases, a level not seen since 2011 per CoreLogic data.

In the second quarter, both large- and mega-investors consistently made around 8,000 purchases per month, aligning with the figures observed prior to the surge in home investor activity in 2021. In contrast, small-scale investors conducted 38,000, 46,000, and 38,000 purchases in April, May, and June respectively. Although these figures mark notable declines from the remarkable numbers seen in 2021 and 2022, they still stand above the levels recorded in 2019 and 2020.

In those preceding years, the corresponding figures for the months of April, May, and June were as follows: 30,000, 34,000, and 31,000 in 2019; and 22,000, 23,000, and 32,000 in 2020. These comparative numbers underscore the evolving dynamics of the real estate market and the varying degrees of investor participation in different years.