Investor activity in the housing market remained strong in early 2024 but dropped in Q2 2024 for the first time in two years. According to property information provider Corelogic, investors in January made up 29.8% of single-family home purchases, a record high, but by June, that share fell to 23.4%. Despite the decline, investor activity is still higher than pre-pandemic levels, which ranged between 15% and 20%.
The change in investor demand could be caused by a number of factors, such as high costs or the fact that more homebuyers have been stepping back into the market. Either way, it is unclear what sort of impact this recent decline will have on the overall marketplace.
Investors bring additional demand to the market, but not additional supply, so they impact prices. Research is limited on how significantly they impact prices. Still, there is research showing that investors made substantial contributions to the price recovery from 2007-14, so there is a plausible, but not yet substantiated, case to be made that investors help prevent sizable drops in prices after interest rate increases slow down the market.
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