Investor buying spurred by demand for rentals
Investors looking for yield are acquiring more low-priced homes to fill growing rental demand, according to the latest HousingPulse Tracking Survey from Campbell/Inside Mortgage Finance. The survey shows that investors now dominate discount housing markets, and that first-time homebuyers are fading in favor of short-term living arrangements. In fact, 61.6% of properties purchased by investors in October are slated to be rented out at some point. The report notes that investor purchases represented 22.3% of all closed transactions in October. That compares to 19.6% in July, which is the last time the survey recorded this type of information. Campbell/Inside Mortgage Finance says the upswing in investor demand for real-estate owned properties comes at a time when more families are turning to rentals. Average prices for REOs in October hit $101,100. This low price allows investors to grab the property, revamp it and turn it into a rental unit. While investors are absorbing more distressed properties, first-time homebuyers are becoming less active in the lower-priced market. Campbell/Inside Mortgage Finance bases its conclusions on feedback from 2,500 real estate agents. Write to Kerri Panchuk.