Property Investors Bet $64 Billion on U.S. Homes in Record Buying Spree
Investors bought more than 90,000 homes in the three months through September, up 10% from the prior quarter and 80% from a year earlier, according to a report by Redfin Corp.
Low interest rates and a persistent shortage of affordable properties have pushed investors to stomach higher prices as they bank on rent growth and price appreciation.
The record surge of capital into the housing market comes as soaring home prices have made it harder for many families to buy a house.
“I largely attribute this to the decline of the middle class in America,” said Daryl Fairweather, chief economist at Redfin. “The more the rich get richer, the more opportunity there is for investors to buy homes and rent them out.”
Investors have typically focused on lower-priced homes, but in the third-quarter they ramped up their purchases of higher-end properties, reflecting increased competition and confidence that the housing boom will continue.
The median price of investor purchases was $438,770, the highest on record. Three quarters of the homes were single-family residences, while the balance was a combination of condominiums, co-ops and other property types.
For the purposes of the report, Redfin defined investors as any buyer whose name included “LLC,” “Inc.,” “Corp.” or other keywords that indicate professional ownership.
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