More Investors Renting Homes Instead of Reselling Them

house for rentAn increase in demand from owner-occupant home buyers has forced investors to rent out nearly half of the homes they purchase, as opposed to buying them, renovating them and reselling them to other prospective home owners.

Investor purchases of houses declined for the third straight month in July as investors were forced to adapt to new business models. Investor marketing shares also fell to the lowest level in more than a year. According to recent surveys, investors accounted for only 19.6% of home purchase transactions in July, down from a 23.0% investor market share seen in April.

It has also been noted that the proportion of first-time home buyers in the housing market increased to 36.9% in July from 35.4% in June. In addition to that, the Distressed Property Index also increased to 46.2% in July from 44.7% in June. This indicates a higher percentage of foreclosed property sales and short sale transactions in the housing market.

The inability of many investors to resell homes in the current housing market has decreased their participation in the housing market. It has been estimated that investors will ultimately rent out 48% of the properties they acquire in the coming months. Renting out homes is becoming more and more prominent not only in Texas but all across the country.

Due to harsh economic times, debates over the national debt ceiling and an ever-decreasing housing market, it is no surprise that more and more people are buying homes and renting them out as opposed to reselling them. Many families cannot afford a down payment on a house, let alone what it costs to buy the house entirely. That is why many families are switching to renting homes instead.

Source: UPI.com – Investors are Renting Out, Not Reselling

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