Real estate investors purchased a total of 87,500 U.S. homes in the second quarter of 2022, up 11% from Q1 and 5.9% higher than Q2 2021. Though investor purchases have fallen from the all-time high of 93,700 in the third quarter of 2021, investors are still buying far more homes than they were pre-pandemic, and that trend could continue throughout a market slowdown, Redfin reports.
Softening homebuyer competition has presented investors with an opportunity to purchase for-sale properties that can be turned into rentals. A cooling market has caused a slowdown in rent growth, but as more would-be buyers are priced out of home purchases, rental demand remains strong in most popular metros across the U.S.
But the fact that investors are purchasing fewer homes than they were at the height of the pandemic illustrates that other investors–likely those who flip homes for a quick profit rather than rent them out– are shying away amid economic uncertainty and the daunting possibility of buying high and selling low. The typical home investors bought in the second quarter cost a record $474,000, a big jump from $427,000 a quarter earlier and $423,000 a year earlier.
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