UPDATED, May 24 2021, 12:00 p.m.: Institutional buyers are in spending mode.
Investors dropped a record $77 billion on homes in the past six months, according to Business Insider, citing a Redfin report. That compares to the $55 billion spent on homes in the second and third quarters of 2020, when buying dropped as Covid cases surged and cities imposed restrictions.
Overall, the number of homes acquired by investors jumped 2.7% in the first quarter compared to the same period last year.
The massive purchases have added to the nationwide housing crunch amid what has been a red-hot market.
Investors are most focused on single-family homes, which made up the biggest share of acquisitions and first-quarter growth, year over year. Nearly 39,000 of the 55,000 homes investors bought in Q1 were single-family properties, up 4.8% from last year.
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Among the investors cited in the Redfin report were Invitation Homes and American Homes 4 Rent, both single-family-rental behemoths. Redfin’s report also included iBuyer Opendoor snapped up 3,594 homes in Q1, Business Insider reported. Others like Offerpad and Zillow, have taken to gobbling up houses, sight unseen.
Small real estate companies and individuals looking to flip properties accounted for a portion of investors in cities like Miami, Atlanta, Las Vegas, Phoenix, and Charlotte, North Carolina.
Redfin chief economist Daryl Fairweather said he expects the buying momentum to accelerate.
“Investors took a huge pause during the pandemic, and they still haven’t made up for all the homes they didn’t purchase during that period,” she told the publication.
With a larger institutional presence, an already tight housing market could grow tighter. Single-family-rental companies can also overshadow smaller buyers with all cash deals and a more aggressive approach to closing.
[BI] — Suzannah Cavanaugh
Correction: An earlier version of this story stated that Opendoor bought 55,000 homes in Q1; the company bought 3,594 homes.