Real Estate Investors Purchased 26.1% of Low-Priced US Homes Sold in 2023Q4

On Wednesday, Redfin reported that real estate investors purchased 26.1% of low-priced US homes that sold in 2023Q4. According to Redfin, that is the highest share on record and is up 24% year-over-year. By comparison, investors purchased 13.6% of mid-priced homes that sold, compared to 14.3% a year earlier, and 15.9% of high-priced homes that sold, compared to 15.4% a year earlier.

For its analysis, Redfin defined low-priced homes as those in the bottom tercile of local sale prices, while mid-priced are those in the middle tercile and high-priced are those in the top tercile. Low-priced homes made up 46.5% of all investor purchases in Q4 (versus 47.2% a year earlier), while mid-priced homes made up 24.6% (versus 26.4% a year earlier) and high-priced homes represented 28.8% (versus 26.5% a year earlier).

Redfin data shows investor purchases of US homes fell 10.5% year over year in Q4 to 46,419—the lowest Q4 since 2016. Overall home purchases posted a slightly larger decline, falling 12.2% to 251,462—the lowest Q4 since 2012.

Investor home purchases have fallen in part because high interest rates, elevated home prices, and a sluggish rental market have made investing less lucrative, Redfin said. Some investors have shifted their money into other investments that offer good returns and lower risk, such as Treasury bonds. But Redfin agents in both California and Florida said many investors are still hungry for homes.