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Property Investors Pulled Back in 2023

Analysts expect investor purchases in 2024 to follow the muted trend in 2023, and some big investors to make deeper commitments to rentals. 

NEW YORK – Real-estate data and analytics firm Parcl Labs reported a 29% decline in investor purchases of single-family homes in 2023, as businesses acquired just 570,000 homes.

In 2022, businesses acquired 802,000 homes. Higher mortgage rates and record home prices led to fewer purchases by investors, and Parcl reported just 123,000 investor purchases in the fourth quarter of 2023, the lowest quarterly total in the eight quarters tracked by the firm.

The National Association of Realtors® also reported that existing-home sales fell 19% last year, the lowest level since 1995. While rates on 30-year mortgages have fallen since their peak in the fall, home shopping activity has already started to increase.

However, many analysts expect institutional investor purchases of homes to remain muted this year, mirroring last year's levels. Private equity firm Blackstone is among the investors looking to invest in rentals, with its recent deal to take Tricon Residential private. The firm owns over 35,000 homes, most in the Sunbelt, and also develops multifamily homes in Canada.

Parcl also indicated that in 2023, investors accounted for 11 of all home purchases nationally.

Source: Wall Street Journal (01/23/24) Parker, Will

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