Housing Market Measures

The Flip Side: Residential Real Estate Investing Trends For 2024

53 percent of residential real estate investors expect business growth in 2024

A new report from New Western reveals as first-time home buyers evaluate housing options amid low inventory, 55 percent feel that local investors have a role in solving the housing shortage. Access the complete report here.

DALLAS, Dec. 13, 2023 /PRNewswire/ — New Western, the largest national private real estate investment marketplace, today released a study on single family real estate investor sentiment and first-time home buyers’ perception of the housing market. Notably, 53 percent of residential real estate investors expect business growth in 2024, while 55 percent of consumers feel that local investors can help solve the housing shortage.

 

Key Highlights:

  • 79 percent of consumers who have considered purchasing a home in the past 12 months have not yet bought one making 2024 a ripe year for home purchases. Biggest barriers are mortgage rates and finding the right home. Further, 30 percent of consumers who have considered purchasing a house in the past 12 months are first-time home buyers.
  • A little over half of those who have not purchased a home yet are worried about finding a home in the next year, though they remain optimistic.
  • 48 percent of those interested in purchasing a home are Millennials; they tend to be married living in suburban areas with 53 percent of them having children under 18.
  • Right now, investors are motivated first by profit potential but are also eager to diversify their investment portfolio and provide housing options that are more affordable to home buyers. Further, location/neighborhood consistently remains the most important factor for investors’ buyers outperforming interior design, outdoor space and home square footage.

“As we enter the new year with continued low inventory, local investors are providing solutions to the shortage by fixing up unlivable homes and putting them back on the market, giving consumers more options for their home buying search,” said Kurt Carlton, co-founder and president of New Western. “Investors are fueled by the opportunity to capitalize while delivering much needed residential properties back to the market.”

From the first half of 2023 to the second half, New Western saw growth nationwide with local markets Houston, Raleigh, Atlanta, Denver and Austin leading the increase in investor-purchased homes. Additionally, New Western saw a 16 percent rise in investor purchases in the West and 6.5 percent in the South during the same time frame.

Market sentiment from additional experts:

  • “The housing market moves fast with where the bond market goes. As mortgage rates headed up toward 8%, the market did slow down, but not as much as we saw last year. The inventory growth was slower, and the year-over-year price growth % was still below 2022 levels even when mortgage rates got toward 8%. Now that the mortgage rates have fallen almost 1% from the highs, we have already seen demand pick up from the low levels, similar to what happened at the end of last year,” said Logan Mohtashami, housing data analyst and financial writer at HousingWire.
  • “Homebuyers remain optimistic that housing inventory will become available in 2024. With data pointing to improving conditions for home construction in the coming months, paired with a rise in local investor activity, we should begin to see the gap shrinking between supply and demand. Further, NAHB is forecasting approximately a 5% increase for single-family starts in 2024 as financial conditions ease with improving inflation data in the months ahead,” said Robert Dietz, chief economist and senior vice president for economics and housing policy for NAHB.
  • “The Fed’s stated goal of ‘higher for longer’ interest rates will keep supply muted relative to history, but we’ve already passed the point of peak ‘lock-in’ effect, and we suspect that more buyers and sellers will let go of the hope for significantly lower rates as time goes on. Flippers will continue to be a particularly important source of housing supply in markets where new home construction is limited and current homeowners cling to their low mortgage rates as long as possible,” said Rick Palacios Jr., head of research at John Burns Real Estate Consulting.
  • “2024 will bring prosperity in looking towards residential and student housing alongside renovation strategies and new builds from existing HUD and FHA renewals. Geography and proximity of walking scores along with accessibility are vital to providing metrics for financial planning,” said a New Western investor.

The survey and report, titled “The Flip Side: Residential Real Estate Investing Trends for 2024,” is an analysis from insight based on opinion polling from October to November 2023 from over 1,280 real estate investors ages 18+ who have previously purchased property through New Western or plan to in the future and an external survey in the same time period among consumers who are looking for a new home from Gutcheck, a global market research company, as well as New Western market sales data. The external survey includes over 820 participants ages 18+ who must have considered purchasing a house in the last 12 months or who have purchased one.

For more information about New Western, please visit here.

 

 

 

About New Western
New Western is a real estate investment marketplace that makes investing more accessible for more people. Operating in most major cities, our marketplace connects more than 200,000 local investors looking to rehab houses with sellers. As the largest private source of investment properties in the nation, we buy a home every 13 minutes. New Western delivers new opportunity for all—a fresh start for sellers, exclusive inventory for investors, and in doing so, creates housing that is more affordable for buyers. New Western was honored with a Glassdoor Employees’ Choice Award in the U.S. small and medium company category, recognizing the Best Places to Work in 2023.