Residential real estate investors continued to make noise in the single-family housing market in fourth-quarter 2022 by making more than one-quarter of purchases during the period, according to CoreLogic.
After the share of single-family home purchases made by investors fell to 21% in June 2022, it rebounded to 26% in September and has remained in this neighborhood since then. That’s about two percentage points lower than the peak of 28% set in February 2022 but still far above the levels reached before the pandemic-induced housing boom began.
Investors still purchased fewer homes in the fourth quarter compared to a year earlier, mirroring non-investors and the market as a whole. On average, investors bought 81,000 homes per month in Q4 2022, a 25% plunge from the activity seen in Q4 2021. But while owner-occupied purchases during Q4 2022 were well below the fourth-quarter levels in 2019 and 2020, investor purchases were generally on par with activity during these periods.
Digging deeper, the data shows that small investors are making more noise in the relatively quiet marketplace. Investors who own fewer than 10 properties saw their share of total investor purchases grow from 45% to 48% between September and December of last year. Conversely, mega-investors (those with more than 1,000 properties) appear to be showing more restraint, with their share of investor purchases falling from 11% in September to 9% in December.
Medium-sized investors (owners of 11 to 100 properties) and large investors (owners of 101 to 1,000 properties) largely held steady during the same time frame at 35% and 8% of investor purchases, respectively.
All four groups, however, hit the brakes on investment activity in the winter, regardless of market share movement. For example, small investors bought 47,000 properties in September, but that figure dropped to 36,000 in December. Medium-sized investors slowed their roll from 32,000 purchases in September to 27,000 in December.
While investor share grew in the winter, CoreLogic expects it to slip again soon. With spring on the way, owner-occupied buyers should come back into the market. CoreLogic noted, however, that investor activity appears to be settling into an average share between 22% and 26%, close to the levels held prior to the pandemic.