Investor Home Purchases Dropped 45 Percent Since One Year Ago

By Holly Dutton

The boom times of investor home purchasing seem to be a thing of the past. A new report from home listing site Redfin shows that investor home purchases fell 45 percent in the second quarter from the same time period last year. The figure marks the largest decline since 2008, with the exception of the first quarter of this year, when sales plummeted 48 percent. The drop in purchases of homes by investors also outpaces the overall 31 percent drop in home sales in the U.S. Redfin attributed the drop in purchases to the limited supply of inventory. In the first quarter of 2022, when investor purchases were at a peak, investors purchased a record high of 20.4 percent of all homes purchased in the U.S. In the second quarter of 2023, that was down to 15.6 percent of homes sold.  

The investor home buying frenzy that peaked in early 2022 has fizzled over the last year, but there are still hotspots around the country where investors are getting a big slice of the single-family home market. In the second quarter of this year, Miami had the highest market share of investor home purchases at 30 percent, followed by three California cities: San Diego with 22 percent, Anaheim with 21 percent, and San Francisco with 21 percent. The midwest city of Cleveland rounded out the top five, with 20 percent. On the flip side, the cities where investor purchases decreased the most in the second quarter were Las Vegas, Jacksonville, and Phoenix, which all saw a 65 percent drop in purchases. Areas that were popular with investors during the 2021 and early 2022 peak, especially among iBuyers, have seen notable declines, as many iBuyer firms have shuttered. Investor home purchases, in general, will likely continue to drop or remain muted for the foreseeable future, given the lack of listings driven by homeowners locked into low mortgage rates.

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