Although declining mortgage rates haven’t sparked the housing market, it has sparked interest in investors, as they are purchasing homes at a record pace, according to analysis from Deutsche Bank Research. [1]
“With declining mortgage rates … they’re searching for a better return for their money,” said Lawrence Yun, Chief Economist and SVP at the National Association of Realtors, to FOX Business.
According to the report, the share of investors buying U.S. homes rose to more than 11%. Freddie Mac's latest Primary Mortgage Market Survey found the average rate for a 30-year fixed rate mortgage was 3.60%.
Yun said in the report that real estate is a “more secure return” than most investments, mostly due to a steady gain.
CoreLogic’s latest Case-Shiller U.S. National Home Price Index (HPI) [2]founded home prices rose 3.4% in May 2019, which a slight decrease from the 3.5% in April.
“Growth in home prices, as measured by the Case-Shiller HPI, began to stabilize in May. The more than 100 basis point decrease in mortgage rates since November has revived home sales and given buyers additional purchasing power in the market,” said Tian Liu, Chief Economist at Genworth Mortgage Insurance. “That extra purchasing power is beginning to show up in home prices.”
FOX’s report states the median home price in June rose to $285,700. The average price of a newly-built home during the same time was $310,400.
A report by CNBC [3]found that companies such as Taylor Morrison, Lennar, and Toll Brothers have started building single-family, rent-only communities, aimed at selling to investors.
The topic of investments will be one covered in great detail during the Single-Family Rental and Investment Roundtable [4]on September 23 during the Five Star Conference and Expo.
The event will be led by Jefferey Tesch, CEO of RCN Capital, and will include industry leaders from Bayview Loan Servicing, eMerge Property Solutions, Entera, and more.
Among the topics discussed will be cutting-edge lending strategies for single-family rental investments, understanding the mechanics of investing, how to increase your ROI, and how technology can help produce higher yields.