North Carolina's housing market is even becoming too expensive for investors
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The share of institutional investors who bought Raleigh-area homes shrank last year, mirroring a national trend, according to new data from the real estate firm ATTOM.
Why it matters: Institutional investors — any non-lending group that purchased at least 10 properties in a calendar year — have backed off the last three years as housing affordability has plummeted, the report shows.
Zoom in: Across North Carolina, 7% of home sales were to an institutional investor last year, down from 7.4% in 2023.
- In Raleigh, the share of investor sales went from 8.6% to 7.8%.
- They did, however, increase in the Durham metro area, going from 6% to 6.6%.
Zoom in: Investors bet on growth. They want to see strong population and job growth, solid rental yields, landlord-friendly regulations, affordability, and long-term appreciation potential, ATTOM CEO Rob Barber tells Axios.
- But for the past few years, large investors have been slowing down their activity.
- In the third quarter of last year, just 0.3% of sales went to large institutional investors — those that own more than 1,000 properties — the lowest share in seven years, if the first quarters of the pandemic were stripped out, according to The Wall Street Journal.
- Institutional investors are signaling that homes are priced too high, while individuals might be willing to pay more if the home is a right fit, The Journal noted.
Yes, but: Institutional investors have been criticized in recent years for making it harder for families and individuals to buy homes.
The bottom line: High home prices and high interest rates are even discouraging institutional investors from buying houses.
