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The Flip Side: Residential Real Estate Investing Trends for 2024

By Mihaela Lica Butler | December 18, 2023

Today, New Western, the largest national private real estate investment marketplace, published The Flip Side: Residential Real Estate Investing Trends for 2024 report on the sentiment of single-family real estate investors and the perceptions of first-time home buyers regarding the housing market.

  • 79% of potential homebuyers have not purchased in the past year, indicating a favorable climate for home acquisitions in 2024. The primary obstacles are mortgage rates and identifying the ideal property. Additionally, 30% of these potential buyers are venturing into homeownership for the first time.
  • More than half of those yet to buy a home are concerned about finding a suitable property within the next year despite maintaining an optimistic outlook.
  • Millennials make up 48% of the demographic interested in buying a home, with many being married, residing in suburban areas, and over half having young children.
  • Investors are primarily driven by profit potential while seeking to broaden their investment portfolios and offer more affordable housing options. The location and neighborhood consistently rank as the most crucial factors for investors, surpassing interior design, outdoor space, and home size.

In the first half of 2023, New Western experienced growth across the country, with Houston, Raleigh, Atlanta, Denver, and Austin leading the surge in investor-purchased homes. Moreover, New Western observed a 16% increase in investor acquisitions in the West and a 6.5% rise in the South during the same period.

Key Takeaways from Industry Experts

he 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.

Logan Mohtashami, housing data analyst and financial writer at HousingWire

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.

Rick Palacios Jr., head of research at John Burns Real Estate Consulting

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.

Robert Dietz, chief economist and senior vice president for economics and housing policy for NAHB

The Flip Side: Residential Real Estate Investing Trends for 2024 provides an analysis based on opinion polling conducted from October to November 2023. The insights were gathered from a diverse group of over 1,280 real estate investors, all aged 18 and above, who have either previously purchased property through New Western or have intentions to do so in the future. In addition, an external survey was conducted during the same time period among individuals seeking new homes. This survey was carried out by Gutcheck, a global market research company, and included New Western market sales data. The external survey involved more than 820 participants, all aged 18 and above, who had either contemplated purchasing a house in the last 12 months or had already made a purchase.

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Mihaela Lica Butler is senior partner at Pamil Visions PR. She is a widely cited authority on public relations issues, with an experience of over 25 years in online PR, marketing, and SEO.She covers startups, online marketing, social media, SEO, and other topics of interest for Realty Biz News.
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