Investors Retreat From Housing Market,
Latest HousingPulse Results Show
WASHINGTON, DC (August 28) – Investor participation in the housing
market dropped sharply in July, establishing a two-month trend and
showing a clear reversal of long-term growth in investor purchases of
residential properties, according to the Campbell/Inside Mortgage
Finance HousingPulse Tracking Survey.
Investor participation in the housing market fell to 21.9% of all
transactions in July, from 23.5% in June, based on a three-month moving
average. Investor participation back in May of this year hit a two-year
peak of 25.3% of all transactions.
estate agents responding to the HousingPulse survey indicated
that recent price increases caused the sharp reversal in investor
interest. “Investors are dropping out due to the increase in prices,”
reported an agent in California. “Prices are too high here for
investors,” added an agent in Massachusetts.
“Smart money” is beginning to leave
from the market, according to HousingPulse survey respondents.
“Investors are having a hard time finding what they want. Starting to
see ‘dumb’ investors enter the market, the ‘smart’ ones are exiting the
buying,” reported an agent from Arizona. “Investors need a deal. There
are not as many opportunities as there was this time last year. It seems
all the rookie investors are buying now and paying too much,” observed
an agent in Florida.
proportion of distressed properties in the housing market fell sharply
to 42.2% in July, from 45.1% in June and 46.1% in May, according to the
HousingPulse Distressed Property Index (DPI). While investors
often concentrate their purchases on distressed properties, the decline
in investor purchases was also apparent in the non-distressed market.
Investors bought 14.4% of non-distressed properties in May, but only
11.5% in July—a precipitous two-month decline.
contrast to investors, current homeowners showed strong interest in
buying homes, accounting for 43.5% of home purchases in July, up from
40.3% in May and 42.0% in June. Participation by first-time homebuyers
was mostly flat. Use of cheap mortgage financing by current homeowners
increased strongly during the months of June and July.
“Overall homebuyer demand and home price appreciation is being driven by
historically low interest rates,” commented Thomas Popik, research
director for Campbell Surveys. “But savvy investors are the canaries in
the coal mine—they are warning that if rates rise, the high proportion
of distressed properties could once again push home prices down.”
Campbell/Inside Mortgage Finance HousingPulse Tracking Survey
involves approximately 2,500 real estate agents nationwide each month
and provides up-to-date intelligence on home sales and mortgage usage
more information on the survey, contact John Campbell at Campbell
Surveys at (202) 363-2069 or
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