Real Estate Investors Cooling on Homes

Washington, DC, July 23, 2013 -- There are signs that investors are cooling on the distressed housing market, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

Current homeowners are providing much of the buying power currently driving the housing market, Campbell said, while investors are continuing to lose steam in the face of rapidly escalating home prices.

The new HousingPulse data shows that current homeowners were the only group that saw its share of home purchases rise last month – from 43.8% in May to 44.6% in June based a three-month moving average. First-time homebuyers witnessed a slight drop in marketshare, going from 36.0% to 35.7% during the same one-month period.

But the bigger story was the continuing slide in investor participation in the housing market. In June, the investor share of home purchase transactions fell to 19.7%, HousingPulse results show. That was down from a 23.1% share found as recently as February and the lowest level recorded since September of 2012.

Another factor in the slide in investor activity is the supply of distressed properties, which has been shrinking at a rapid rate. The HousingPulse Distressed Property Index shows that the percentage of home purchases involving foreclosures or short sales tumbled to 28.2% in June, a big drop from the 40.3% level recorded a year earlier. It also was the lowest distressed property share recorded in at least three and half years.

Thirty-one percent of sales were all cash, Campbell said. That share is usually below 10%.


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