Chat
Chat with Sales Hours: Monday-Friday 8:30 a.m. - 4:30 p.m. (CST)
Contact Sales
Call Sales Toll-Free 1-(866) 774-3282 Hours: Monday-Friday 7 a.m. - 5 p.m. (CST)
Product Login
Product Log-in
Product Support
Product Support
Email Sales
Contact Sales
After Hours
  • Support
  • Sign In Sign In
  • AUS NZ UK
CoreLogic - Home
  • Solutions
    view solutions by:

    Data Solutions

    • Lead Generation
    • Property Data
    • Location Intelligence

    Real Estate

    • Multiple Listing Enterprise
    • Agent & Broker

    Mortgage

    • Origination
    • Servicing
    • Appraisal
    • Commercial Property Tax

    Insurance

    • Hazard Risk
    • Catastrophe Risk Management
    • Risk Evaluation
    • Underwriting Automation
    • Weather
    • Claims Automation
    • Restoration
    • INTRCONNECT

    Mortgage Lenders

    • Origination

    Mortgage Servicers

    • Residential Property Tax
    • Default & Loss Mitigation
    • Portfolio Insight & Monitoring

    Mortgage Appraisers

    • Appraisal

    Real Estate Agents & Brokers

    • Agents & Brokers

    Real Estate MLS

    • Multiple Listing Enterprises

    Commercial Real Estate Owners

    • Commercial Property Tax

    Marketing Departments

    • Property Data

    Insurance Underwriters

    • Risk Evaluation
    • Underwriting Automation
    • Hazard Risk
    • Catastrophe Risk Management

    Insurance Risk Managers

    • Risk Evaluation
    • Hazard Risk
    • Catastrophe Risk Management

    Insurance Claims

    • Claims Automation
    • Restoration Contractors
    • Weather Verification

    Construction Contractors

    • Restoration Contractors

    General

    • Location Intelligence
    • Lead Generation
    • Data Solutions
  • Resources

    Reports

    • Climate Change
    • Construction Cost Update
    • Construction Insights
    • Home Price Insights
    • Homeowner Equity Insights
    • Loan Performance Insight
    • Mortgage Fraud
    • Property Tax Delinquency
    • Single-Family Rent Index

    Insight Blogs

    • Hazard HQ
    • Office of Chief Economist
    • Affordable Housing
    • Homebuying
    • Insurance
    • Other Articles

    More Resources

    • Events
    • Case Studies
    • White Papers
    • Podcasts
    • Quick Takes
  • Company
    • About
    • Leadership
    • Newsroom
    • Contact
    • Careers
  • Search
CoreLogic - Home
  • Solutions
  • Resources
  • Company

    • About
    • Leadership
    • Newsroom
    • Contact
    • Careers
  • Accounts

    • Products Sign-in
  • Contact

    • Sales Contact
    • Product Support
  • Regions

    • Australia
    • New Zealand
    • United Kingdom
  • Social

    • Facebook
    • Instagram
    • Linkedin
    • Twitter
    • Youtube
Solutions
VIEW BY:
  • Data Solutions

    • Lead Generation
    • Property Data
    • Location Intelligence
  • Real Estate

    • Multiple Listing Enterprise
    • Agent & Broker
  • Mortgage

    • Origination
    • Servicing
    • Appraisal
    • Commercial Property Tax
  • Insurance

    • Hazard Risk
    • Catastrophe Risk Management
    • Risk Evaluation
    • Underwriting Automation
    • Weather
    • Claims Automation
    • Restoration
    • INTRCONNECT
  • Mortgage Lenders

    • Origination
  • Mortgage Servicers

    • Residential Property Tax
    • Default & Loss Mitigation
    • Portfolio Insight & Monitoring
  • Mortgage Appraisers

    • Appraisal
  • Real Estate Agents & Brokers

    • Agents & Brokers
  • Real Estate MLS

    • Multiple Listing Enterprises
  • Commercial Real Estate Owners

    • Commercial Property Tax
  • Marketing Departments

    • Property Data
  • Insurance Underwriters

    • Risk Evaluation
    • Underwriting Automation
    • Hazard Risk
    • Catastrophe Risk Management
  • Insurance Risk Managers

    • Risk Evaluation
    • Hazard Risk
    • Catastrophe Risk Management
  • Insurance Claims

    • Claims Automation
    • Restoration Contractors
    • Weather Verification
  • Construction Contractors

    • Restoration Contractors
  • General

    • Location Intelligence
    • Lead Generation
    • Data Solutions
Resources
  • Reports

    • Climate Change
    • Construction Cost Update
    • Construction Insights
    • Home Price Insights
    • Homeowner Equity Insights
    • Loan Performance Insight
    • Mortgage Fraud
    • Property Tax Delinquency
    • Single-Family Rent Index
  • Insight Blogs

    • Hazard HQ
    • Office of Chief Economist
    • Affordable Housing
    • Homebuying
    • Insurance
    • Other Articles
  • More Resources

    • Events
    • Case Studies
    • White Papers
    • Podcasts
    • Quick Takes

Home / Intelligence / Investor Activity in the Housing Market

ABOUT THE AUTHOR
Thomas Malone
Thomas Malone
Professional, Economist
View Profile
  • August 30, 2021

Investor Activity in the Housing Market

Investor activity in real estate markets during the COVID-19 pandemic has mirrored the market as a whole.

Investor Purchases

The blue line in Figure 1 shows the year-over-year change in investors’ purchases nationally.

Figure 1

Figure 1 Thom Malone
© 2021 CoreLogic,Inc., All rights reserved.

The blue line showed a consistent growth path through 2019 before falling sharply in March and April of 2020. Investor purchases reached their lowest point in May 2020 with a year-over-year decline of 36%. Since then, they’ve still only recovered with a year-over-year increase of 12% in December of last year.

Given the all-encompassing nature of the COVID-19 recession, this should not be surprising.

Investor Activity

Even though investor purchases are up, their market share is down. The orange line in Figure 2 shows the year-over-year change in the share of home purchases that investors made.

Figure 2

Figure-2-Thom Malone
© 2021 CoreLogic,Inc., All rights reserved.

The year-over-year change in the share of purchases made by investors was negative throughout the second half of 2020. This means that the recent home price boom has primarily been driven by homeowner purchases.

Investors’ market share didn’t return to its previous level of 16% until December.

Like the blue line, the orange line shows a consistent growth path through 2019 before falling sharply and suddenly in March and April of 2020. This is the same as what we know about overall home sales during this period. The orange, however, shouldn’t necessarily track this closely; that it fell so sharply indicates that a disproportionate amount of the decline in housing market activity is due to declines in investor purchases.

Comparison and Recovery

The two lines begin to diverge in the recovery. Growth in investor purchases became positive again in the third quarter, while the change in the investor remained negative throughout the year. So, the increase in non-investor sales purchases has been disproportionately more responsible for the recent housing market boom.

All in all, the blue line in Figure 1 shows that investors have hardly missed out on the housing boom in the back half of 2020. Instead, they have just not been as active as individual buyers, who appear to have muscled investors out of the market by a small margin.

Figure 3: State-By-State

Figure 1 YOY Change in Investor Activity By State December 2019 to 2020

Figure 3 shows the year-over-year growth in investor sales by state for 2020. The Mountain-West had the most investor activity over the past year, as did the smaller New England states. The more Southern states in the Midwest were a strong cluster. The Northeast and the West Coast by far had the weakest activity.

There are many possible reasons for the variation amongst states. Investors have an attraction to markets that hit the sweet spot of high growth in both prices and sales that unambiguously indicates significant demand increases. Their strong presence in the Mountain-West , probably the hottest region for housing in the country, shows this. The lower Midwest also offers strong growth at bargain prices. Conversely, the Northeast and the West Coast make investors very nervous due to their markedly higher prices than the rest of the country.

Tenants’ Rights

Typical investor drivers can’t explain why low-growth places like the upper New England states, and Iowa, have strong growth. None of these places have been historically hot spots for investment, nor have they shown exceptional economic strength during the recovery. These states highlight a particular layer of risk that investors had to consider in 2020: tenants’ rights.

The recession has left many unable to pay their rent after becoming unemployed. Typically, an investor would often evict a tenant by not paying their rent and finding a replacement. However, during the pandemic, many states banned evictions. Such measures are a natural deterrent to investor activity since it raises the possibility that you could get stuck with a renter who doesn’t pay and who you can’t replace.

Figure 4

Figure -4-Thom Malone
© 2021 CoreLogic,Inc., All rights reserved.

Figure 4, a box and whisker plot, shows some evidence for the idea that tenants’ rights could explain the investment patterns during 2020.  The left box shows the distribution of growth in investor activity was much better in states that no eviction moratorium of any sort than places that had one at some point in 2020. Comparing the line at the center of each box we can see that the average state without an eviction moratorium saw a 2% increase in investor activity. In contrast, the median state with an eviction ban saw a 5% decline.

Of course, tenant rights are not the be-all-end-all in investor decision-making. Local economic and housing market fundamentals are still higher on the totem pole. A state could have the legal environment more skewed towards landlords than any other state, but no investor will not want to put their money there if there are no signs of appreciation or growth.

Such states as South Dakota and Mississippi had weaker tenant rights in 2020, but both experienced enormous declines in investor activity. Kansas was one of the higher states with a 5% growth in investor activity, and evictions are still limited there at the time of writing. Tenant rights mattered for investing in 2020, but they were a second-order consideration.

As COVID-19 related provisions are pulled back, expect to see investment activity pick up even more and for the geographic pattern of growth across the country to look very different than last year.

©2021 CoreLogic, Inc. All rights reserved

  • Category: Intelligence, OCE Monthly, Podcast/Vodcast
  • Tags: Housing Market, Investor Activity, Market Trends
ABOUT THE AUTHOR
Thomas Malone
Thomas Malone
Professional, Economist
View Profile

Related Posts

Header Intelligence Protect storm HHQ hazard
Climate Change

2023 Severe Convective Storm Risk Report

As rising global temperatures continue to contribute to increasingly hazardous wildfire seasons, it is more important than ever for homeowners, insurers, and governments to understand the risk these hazards pose to their communities.

March 31, 2023
Construction worker framing a house
Construction Insight

Quarterly Construction Insights – Q1 2023

CoreLogic tracks construction cost for commercial, residential and agricultural construction of all types of goods (labor and materials) throughout the United States and Canada.

March 30, 2023
Jan23LPIPromo
Blogs

Loan Performance Insights – March 2023

U.S. mortgage delinquency and foreclosure rates continued to hold near record lows in January.

March 30, 2023

About Corelogic

  • Newsroom
  • Leadership
  • Careers
  • Ethics & Compliance

Accounts

  • Products Sign-in

Contact

  • Sales Contact
  • Product Support

Regions

  • CoreLogic Australia
  • CoreLogic New Zealand
  • CoreLogic UK

Follow & Connect

  • Facebook
  • Instagram
  • Linkedin
  • Twitter
  • YouTube
© 2023 CoreLogic. All rights reserved.
  • Legal
  • Privacy Policy
  • CCPA
  • Cookie Preferences
  • Security
  • Sitemap
  • Accessibility
  • Legal
  • Privacy Policy
  • CCPA
  • Cookie Preferences
  • Security
  • Sitemap
  • Accessibility