Especially in pandemic boomtowns, a growing share of investors is losing money on homes sold in recent months.
That’s according to Seattle-based Redfin Corp. (Nasdaq: RDFN), which found 13.5% of homes sold by investors across the U.S. in March sold for less than the investors bought them for, reflecting how the market has changed in the past several months in the wake of higher mortgage rates and weaker buyer demand.
It’s slightly less than the amount observed in February, when 14.5% of investors sold homes they owned for less than they bought them for, but March’s share is nearly triple the share of investor losses a year earlier.
Taylor Marr, deputy chief economist at Redfin, said there are distinctions among the types of buyers considered to be an investor, which is hard to discern from data, but the housing market is affecting investors in different ways. An investor is defined by Redfin as a buyer with LLC, Inc., Trust, Corp. or Homes in its name.