Real estate investors purchased approximately 44,000 homes during the first quarter, up 0.5% from one year ago, according to new data from Redfin (NASDAQ: RDFN). And while the uptick is relatively mild, it marks the first increase since the second quarter of 2022.
Investors accounted for 18.7% of homes purchases, up from 17.9% in the first quarter of 2023. The typical home sold by an investor by the end of the quarter went for 55.2% more ($174,616) than the investor bought it for – up from 46.3% ($146,586) a year earlier. And only 5.3% of homes sold by investors sold for a loss, down from 13.7% one year before.
The typical home bought by investors in the first quarter cost $464,560, up 9.2% from one year earlier. Investors purchased $31.3 billion worth of homes in the first quarter, up 6.6% year-over-year. Investor purchases of high-priced homes jumped 10.5% year over year in the first quarter – the first increase in nearly two years – while investor purchases of mid-priced homes rose 4.7% (also the first increase in nearly two years) and investor purchases of low-priced homes fell 6.5%.
More than two-thirds of investors (69%) engaged in all-cash transactions. Investor purchases of single-family homes rose 3.9% year over year in the first quarter, the first increase in nearly two years, but investor purchases of townhouses, condos/co-ops and multifamily properties fell 8.6%, 6.4% and 2.5%, respectively. Single-family homes represented 68.9% of investor purchases in the first quarter – the highest percentage since mid-2022. Meanwhile, condos/co-ops represented 18.7%, townhouses made up 7.2% and multifamily properties made up 5.3% – all down from one year earlier.
Among the major metro markets, investor home purchases jumped 27.8% year-over-year in San Jose during the first quarter. Other metros that recorded significant increases in investor activity were Oakland (22%), Minneapolis (21.6%), Sacramento, CA (20.1%) and San Francisco (18.5%). On the flip side, Cincinnati recorded a 22.1% year-over-year decline, the biggest drop among the metros Redfin analyzed.
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