![](\"https:\/\/www.floridarealtors.org\/sites\/default\/files\/styles\/full_width_main_image\/public\/page\/image\/2021-10\/gettyimages-1287525198.jpg?h=538ccb8d&itok=ECCTC2Mv\")
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Given a mild drop in some metro\u2019s home prices, more investors are taking a wait-and-see attitude. And flippers who use short-term loans are dealing with higher costs.<\/span><\/span><\/p>\n<\/div>\n SEATTLE \u2013 Investor purchases of U.S. homes fell a record 45.8% year-over-year in fourth quarter 2022. The higher cost to borrow money and a wariness over declining home values made real estate investing less attractive, according to a report from Redfin.<\/span><\/span><\/p>\n The second-biggest decline in investor purchases occurred in 2008, when they slumped 45.1% during the subprime mortgage crisis.<\/span><\/span><\/p>\n But it\u2019s not just investors. Overall U.S. home purchases fell 40.8% year-to-year in 4Q 2022.<\/span><\/span><\/p>\n In Florida, half the metro areas Redfin tracks saw a larger percentage drop in investors; in the other three metros, the investment decline was less than the national average. Still, all Florida metros saw fewer real estate investors compared to 4Q 2021.<\/span><\/span><\/p>\n In a quarter-to-quarter comparison (4Q 2022 to 3Q 2022) investor purchases slumped 27% \u2013 the largest quarterly decline on record aside from the beginning of the pandemic. That\u2019s comparable with the 28.1% quarterly drop in overall home purchases.<\/span><\/span><\/p>\n Since investor share of purchases dropped in tandem with non-investors purchases, however, the overall share of homes owned by investors remained about the same. Investors purchased 17.8% of all homes in the metros tracked by Redfin in the fourth quarter, comparable with 17.6% in the prior quarter and down from 19.4% a year earlier.<\/span><\/span><\/p>\n In dollar terms, investors bought $31 billion worth of homes in the fourth quarter, down 42.7% from $54.1 billion one year earlier and down 27.5% from $42.8 billion one quarter earlier. The typical home investors purchased cost $425,926, little changed from one year earlier but down 5.8% from one quarter earlier.<\/span><\/span><\/p>\n Investors piled into the housing market in 2021 due to rock-bottom mortgage rates and surging housing demand. Now they\u2019re retreating amid projections that home prices have room to fall.<\/span><\/span><\/p>\n Last year\u2019s jump in mortgage rates dampened homebuyer demand. For real estate investors, higher rates also mean it\u2019s more expensive to borrow money, which eats into profits. Rather than investing in real estate in the fourth quarter, many are moving money into other asset classes that offer better returns.<\/span><\/span><\/p>\n For investors who plan to be landlords, slowing rent growth is making it more challenging to reap large returns.<\/span><\/span><\/p>\n \u201cIt\u2019s possible that investors will start to wade back into the market this year given that mortgage rates have ticked down from their 2022 high \u2013 especially if home prices show signs of bottoming,\u201d says Redfin Senior Economist Sheharyar Bokhari. \u201cBut it\u2019s unlikely that investors will return with the same vigor they had in 2021.. She calls that \u201cgood news for individual buyers,\u201d however.<\/span><\/span><\/p>\n \u00a9 2023 Florida Realtors\u00ae<\/span><\/span><\/p>\n<\/div><\/div>\n <\/p>\n <\/p>\n\n4Q 2022 real estate investment changes in Florida<\/span><\/span><\/h3>\n
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A fear of home price declines<\/span><\/span><\/h3>\n