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Property acquisitions by real estate investors during the first quarter were down by 48.6% from one year ago, according to new data from Redfin (NASDAQ:RDFN). This marks the largest annual decline on record, and outpaced the 40.7% drop in overall home purchases in the 40 major metros tracked by Redfin.

From the previous quarter, investor purchases were 15.9%, comparable with the 14.7% quarterly drop in overall home purchases.

Investors bought $27.5 billion worth of homes in the metros tracked by Redfin in the first quarter, compared to $51.2 billion one year earlier and $31.4 billion one quarter earlier. The typical home investors purchased cost $427,901, which is roughly unchanged from the prior quarter and a year earlier.

Investors were responsible for buying 17.6% of the homes for sale in the metros tracked by Redfin in the first quarter – the peak of their activity was the 20.4% share recorded a year earlier.

Low-priced homes made up nearly half (48.7%) of investor purchases in the first quarter, the highest share in two years, while mid-priced homes represented about one-quarter (23.6%) of investor purchases, the lowest share in two years.

Redfin attributed the dramatic decline to the shifts in the housing market – the record-low mortgage rates and heavy demand for housing during the pandemic encouraged the investors to open their wallets, but today’s high interest rates coupled with declining housing values have resulted in an abrupt about-face. And even if the investors are buying property in all-cash transactions, they still need to take out non-mortgage loans to cover renovations and other expenses, which becomes costly into today’s interest rate environment.

“While investors have pumped the brakes on home purchases, they’re still scooping up a bigger share of homes than they were before the pandemic, which can create challenges for individual buyers at a time when there are so few homes for sale,” said Redfin Senior Economist Sheharyar Bokhari. “Investors have gravitated toward more affordable properties due to still-high housing costs and rising mortgage rates, which has left first-time homebuyers with fewer starter homes to choose from.”