Economists' Outlook

Housing stats and analysis from NAR's research experts.

Investment Properties Attract 4.1 Percent Of First-Time Buyers

The first half of the year, the economy progressed at a weak pace—0.4 percent in the first quarter and 1.3 percent in the second. Real estate markets mirrored this trend, with soft residential sales and slowing commercial fundamentals.

However, amidst the slowdown, one area remained positive—apartment properties. With household formation beginning to advance, demand for rental properties has been rising, accompanied by rising rents and declining vacancies.

This fact is attracting the attention of home buyers as well. The median home price in July 2011 was $174,000, down 4.4 percent from the same month a year ago. In addition to declining prices, buyers are finding an environment of historically low interest rates and high affordability. Based on the latest REALTORS® Confidence Index survey, 18 percent of homes were purchased for investment purposes.

More interestingly, the market is also attracting a number of first-time buyers. In July of this year, 4.1 percent of first-time buyers purchased a home for investment. The figure is in line with the average for the year, which stands at 4.2 percent, but it is higher than the average for 2010, which was 3.6 percent. With apartment rents expected to rise 2.5 percent in 2011 and 3.2 percent in 2012, homes purchased for investment reasons will likely continue to attract buyers.

Capture

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.

Advertisement

Comment Policy

The opinions expressed in reader comments sections on this website are those of the reader and not NAR or REALTOR® Magazine.

About Economists' Outlook

Visit this blog daily to see what NAR experts are saying about the economy, the housing market, and other factors that will impact your business.

Follow NAR Research

       

Housing Minute

Housing Minute is a monthly video series highlighting the latest housing data from the National Association of REALTORS® in a minute or less.