Investors Purchased a Quarter of The Country's Most Affordable Homes, Per Report

• February 15th

by UrbanTurf Staff

A new report is shedding light on the high volume of investor home purchases at the end of last year, and how those sales are likely affecting the landscape for first-time buyers. 

Redfin recently reported that more than 1 in 4 purchases of affordable listings in the fourth quarter of 2023 went to an investor, the highest share on record. In contrast, investors purchased 13.6% of mid-priced homes and approximately 16% of high-priced homes.

"Investors are drawn to affordable homes for the same reason as other homebuyers: They cost less, which is especially attractive when home prices and borrowing costs remain elevated," Redfin reported. "And when housing affordability is this strained, there could be more potential for value increases in the lower price tier, meaning more potential for building equity."

In the DC region, investors purchased approximately 11% of homes in the fourth quarter for a median price of $425,000. The percentage of investor purchased homes in the area was much lower than the 19% national average.  

In a market already starved for inventory, some believe that investor purchases are contributing to the supply problem. 

"Many are concerned that investors are hurting regular buyers by driving up costs and exacerbating the shortage of homes for sale, and some lawmakers want to limit tax breaks for big corporate investors that purchase homes."

This article originally published at https://dc.urbanturf.com/articles/blog/investors_purchased_a_quarter_of_the_countrys_most_affordable_homes_per_rep/21975.