For years single-family homes have been an attractive asset class for investors in large part due to low mortgage rates. Now, though, the financial equation is changing, and some investors are finding they are getting burned as they seek an exit.
In March of this year, one in every seven U.S. homes sold by an investor went for less than the investor bought it for, according to Redfin. In February, a similar situation occurred, which represented the highest since 2016 and nearly triple the share of a year earlier.
Certainly, not all investors realized a loss. In fact, the average investor who sold in March did so for 45.9% more or $145,714, than they paid for it. But that number wasn't as good as previously. A year ago, it was 55.3% and at the peak of the pandemic in June 2022, it was 67.9%.
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