Investors Pick Up 18% of Homes in Third Quarter, a Record High

Real estate investors picked up 18.2% of homes in the third quarter of 2021, a new record high.

According to data from Redfin, this represents a 2.1% raise from the second quarter of 2021 and a 7% increase from the same period last year. Investors bought 90,215 homes, the highest amount ever, an increase of 10.1% from the second quarter and a whopping 80.2% from the third quarter in 2020. Comparatively, a decade ago, investors bought less than 20,000 homes in the third quarter of 2011.

It’s no surprise that with rising home prices and an increase in investments, investors spent a record of $63.6 billion on properties, up nearly $5 billion from the previous quarter and an increase of $35.7 billion from a year earlier. Investors were mostly purchasing single-family homes, representing 74.4% of all their purchases, but a record high. It’s an increase from 70.6% in the same time period last year. However, investor interest in condos dipped, representing just 16.9% of their purchases, a record low and down nearly 3% from the previous quarter. Townhouses represented 5.4% of sales, while multifamily represented 3.4%, which has remained stable.

However, investors’ stake in low-priced homes is shrinking. Of investments purchased, 36.1% were low-priced, a record low, while mid-priced homes saw a boost, hitting 33%, an increase of 12.2% from the second quarter. With rising rents, investors are hopping on the opportunity to have more properties available.

In Pennsylvania, only data for Philadelphia was included. Only 14.2% of properties were purchased by investors in the third quarter, up less than 1%. Bucking the national trend, that is actually a 5.4% decrease year over year. Only 794 houses were bought by investors last quarter.