Real Estate Investors Purchased Fewer Homes Year-Over-Year and Quarter-Over-Quarter in Q1

Redfin reported on Wednesday (5-31-23) that real estate investors purchased 48.6% fewer homes year-over-year in 2023Q1, as elevated interest rates—coupled with declining rents and housing values—removed some of the profits from their markets.

Redfin notes that this is the largest annual decline on record and outpaced the 40.7% drop in overall home purchases in all 40 major metro markets tracked by Redfin. On a quarter-over-quarter basis (2022Q4–2023Q1), investor purchases dropped 15.9%, comparable with the 14.7% quarterly drop in overall home purchases.

Adding additional background and his analysis to the report, Redfin’s Senior Economist, Dr. Sheharyar Bokhari, said:

“While investors have pumped the brakes on homes purchases, they’re still scooping up a big 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. Investors have gravitated toward more affordable properties due to still-high housing costs and rising mortgage rates, which have left some first-time homebuyers with fewer starter home to choose from.”