More homes coming on the market for sale, report finds
Typically, May is the month with the highest number of new listings, according to Realtor.com. However, even with the uptick in inventory, buyers have just two homes to consider for every five homes that were available before the pandemic, according to Realtor.com’s analysis.
Homes spent fewer six days on the market during the week ending May 14 compared with a year ago. In addition, homes sold faster in April 2022 than at any other time on record, according to Realtor.com. Homes usually sell fastest in the summer months.
Still, the trend appears to be in place for continued increases in houses for sale, which could ease the competition for buyers.
Buyers in many markets face competition from institutional investors who buy homes for single-family home rentals or to improve and sell. The National Association of Realtors recently investigated the impact of these investors on the housing market. According to NAR’s report, institutional buyers — defined as entities identified in deeds data as corporations, companies or limited liability companies — accounted for 13.2 percent of residential purchases in 2021. This is higher than the 11.8 percent in 2020, but below the peak share of 15.7 percent in 2014.
The study found that on average, 42 percent of single-family properties purchased by institutional buyers were converted to single-family rentals. The rest were sold directly to buyers or were part of a rent-to-own or shared equity arrangement with future owners.
Homeowners who sold to institutional investors rather than traditional buyers in 2021 did so because investors offer cash (29 percent), are willing to purchase the home as is (27 percent) and offer a guaranteed purchase date (18 percent).
The impact of institutional investors is greater in some locations than others. NAR’s researchers found that the top 10 states with the highest share of purchases by investors include Texas (28 percent), Georgia (19 percent), Oklahoma (18 percent), Alabama (18 percent), Mississippi (17 percent), Florida (16 percent), Missouri (16 percent), North Carolina (16 percent), Ohio (16 percent) and Utah (16 percent).
For the full report from Realtor.com, visit www.realtor.com/research/weekly-housing-trends-view-data-week-may-14-2022.
For the full report on institutional buyers from NAR, visit cdn.nar.realtor/sites/default/files/documents/2022-impact-of-institutional-buyers-on-home-sales-and-single-family-rentals-05-12-2022.pdf.