The State Where the Most People Are Investing in Houses
The home market in the United States has exploded for several reasons. The first is the mortgage rates are near historic lows. Another reason is that income of the middle and upper classes in America was not affected as much by the pandemic as people who have small incomes. In addition, people have relocated from the expensive large cities on the coasts to find more affordable places to live. These smaller cities are also viewed as better places for quality of life. Working from home also has helped people move from places where their companies are located.
Not all homebuying is for people who want a place to live. Some people buy homes for investment. These buyers fall into two categories. The first is financial companies, which buy thousands of homes, either to resell or to rent them. The other is individuals who buy homes for resale.
Real estate research firm CoreLogic has just released its “Investor Home Buying Report 2011-2020.” The report is subtitled, “The Difference of a Decade: Rising Purchases among swings in market share.” This study looks at the long-term trend:
In particular, the 2020 investment rate is comparable to the 2012 rate of 15.7%, when low prices and the foreclosure crisis, following the 2006 housing market crash, made the market attractive to investors. Overall, investors have maintained a strong presence in the market over the decade, mostly oscillating within a narrow corridor of 15% to 17% of total purchases for the decade.
CoreLogic looked at investor purchases as a percentage of total purchases across America’s metropolitan statistical areas. The metro area with the largest percentage of buyers who were investors from 2011 to 2020 was Los Angeles at nearly 25%. It was followed by Corpus Christi, Texas, at just below 25%. Next was McAllen, Texas, one of the poorest markets in the country based on median household income and poverty level. That, in turn, was followed by Wichita, Kansas, and Memphis.
The markets with the lowest percentage of home buying by investors were concentrated in the Northeast. The rates in Hartford and Bridgeport, Connecticut, were below 8%.
Click here to read about the most expensive cities in which to buy a home.
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