Investors turning more properties into rentals
Investors are pulling back from the housing market as the flipping model loses speed on weak homebuyer demand, according to the latest Campbell/Inside Mortgage Finance survey.
The HousingPulse Tracking Survey showed demand for properties is low, forcing investors to rent out half the homes they acquire. With few investors satisfied with this model, July investor activity declined, making it the third consecutive monthly drop.
Investors accounted for 19.6% of home purchases last month, down from 23% in April and the lowest level in the 12 months.
Survey results showed the proportion of first-time buyers did rise to 36.9% last month from 35.4% in June. Campbell surveys concluded current homeowners are unlikely to acquire distressed properties, creating a situation where recovery still depends on investor activity.
"The inability of most investors to resell homes in the current housing environment has put a damper on their participation in the housing market this summer," according to Campbell.
Of the properties acquired by investors in July, 48% will be turned into rentals for now, according to the Campbell report. A year ago, only 28% of properties acquired by investors were kept as rentals.
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