Yahoo Finance housing reporter Claire Boston outlines Realtor.com data that shows investors' home buying activity in 2024 pulled back from 2022 record highs and how the amount of investors purchasing a home in all-cash deals fell to a 16-year low.
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The share of US homes bought by investors dipped below record highs in 2024, while US home buyers are still facing mortgage rates near 7% and home prices near all-time highs, that is one headwind for them that may be improving. Yahoo Finance Senior Housing Reporter, Clare Boston, has more. Clare, what do we know?
Hi, Brad. So last year, investors picked up homes on net in 2024. Uh they were about 13% of who were buying homes last year. But when you look at sellers, um about 10.8% of sellers, uh, were these investors. And so on net, how much investors are impacting this market is actually shrinking a little bit, and that can be good news for those first-time home buyers. Investors typically are looking at uh purchasing kind of in the lower end part of the market where first-time home buyers are targeting. So, you know, a little bit less impact there is potentially good news for people who are trying to get into this market in 2025.
All right, now let's talk about the cash money. The share of investors that paid in cash for their home purchases also fell in 2024. Is, is this a good sign for individual home buyers?
Right, I think it's a super interesting data point. So still investors around 60% are using that cash buying, and you know, that can often be very competitive in today's market. That being said, that is the lowest percentage since 2008. So that means more investors are financing, financing can fall through, and uh, you know, when investors are also getting mortgages here, that puts them on a little bit of an even playing field with those everyday buyers.
And so where were investors most actively buying last year from what we saw?
Yeah, so we were seeing a lot of activity in those kind of high economic activity but relatively cheap rent states. So that was places like Missouri, Oklahoma, Kansas. The Midwest market is super interesting because rents there have been rising quite fast. Uh if you look at selling too, that's pretty interesting, investors were selling also on net more in Missouri, Oklahoma, and Georgia. So you know, that kind of Midwest Sunbelt story, that's kind of more where the activity is versus like an expensive market like New York City.
Clare, thanks so much for taking the time.