June 20th 2023
- 15-year: 6.30%
- 30-year: 6.95%
*Mortgage rates via Mortgage News Daily
Institutional Buyer Pulling Back
Institutional investment companies are pulling back from the U.S. housing market.
Definition: Institutional real estate refers to when investment companies, international investors, foundations, insurance companies, hedge funds, or banks buy up properties of sufficient size. Last week, Bloomberg reported that Starwood Real Estate Income Trust plans to shop over 2,000 single-family rentals.
Trends: Investment companies are shopping more properties as commercial real estate takes a hit and the general housing market remains in limbo.According to John Burns Research and Consulting institutional investors (those owning over 1,000 homes) bought 90% fewer homes in January and February of 2023 compared to 2022.
Cash is King
Homebuyers are increasingly using cash to buy homes.According to Redfin, homebuyers paying with cash purchased more than a third of homes sold in April — the highest in nearly a decade.
What’s going on? The share of cash purchases has increased alongside mortgage rates. Buyers who can pay cash are choosing to basically avoid added monthly costs of a mortgage altogether.