Texas cities account for more than half of the U.S. metro areas where investors make a large share of home buys.
In the Dallas area, about a third of homes sold went to investors in the quarter ending with September.
Nationwide, more than a quarter of U.S. homes changing hands were acquired by investors, according to a new report from CoreLogic.
“The high U.S. home investor share seen over the past two years nudged up in the third quarter, despite 2023′s mortgage rate increases,” CoreLogic economist Thomas Malone said in the study. “In July, August and September, the share of single-family purchases made by investors was 26.8%, 27.2% and 28%, respectively.
“Given this trend, it would not be surprising to see these numbers climb above 30% in the fourth quarter of 2023.”
Cities in California and Texas are seeing the largest shares of home purchases by investors.
“San Jose, California, has the highest share at 46%, followed by Los Angeles at 41%; McAllen, Texas, at 41%; and El Paso, Texas, at 38%,” Malone said.
The Dallas area ranked 19th among the 20 top U.S. metro areas for investor acquisitions. Houston placed 16th. McAllen, El Paso and Brownsville were in the top 10 of markets where investors made the most single-family buys.
CoreLogic estimates that investors bought 284,000 homes across the country in the third quarter.
“These numbers are well below the level of investor purchases at the same time in the previous two years, when investors made more than 100,000 buys in each month,” Malone said.
Home purchases by investors for resale have declined with higher mortgage rates.
“However, given the return of positive home price appreciation, it is possible that flipping activity might regain steam in the next few months,” Malone said. “That said, higher interest rates can deter flippers, given that investors will have to make larger monthly payments.”
At midyear, the number of Dallas-Fort Worth home flips was down by almost 30% from the early months of 2023, according to estimates from Attom Data Solutions. Nationwide home flips dropped by about 20% during the same period.
“Though the share of investors is slowly moving up, the market has cooled for such homebuyers,” Malone said. “Flippers are buying at rates that are well below their pre-pandemic levels, and large/mega-investors have stopped their spending sprees.
“The small-investor share is now helping support this section of the housing market.”
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December 30, 2023 at 01:43AM
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