The report measures the share of all single-family home sales purchased by investors, the average price discount of investor-purchased properties, and the share of all-cash sales.

Real estate (RE) investor purchases accounted for 16.4 percent of all home purchases nationally in Q3 2021 compared with 11.7 percent in Q3 2020, a year-over-year increase of just over 40 percent, according to the RealtyTrac Investor Purchase Report.

The report measures the share of all single-family home sales purchased by investors, the average price discount of investor-purchased properties, and the share of all-cash sales. Investors purchase single-family homes in order to fix and flip the properties or convert them into long-term rentals.   

The increase in investor purchase activity was national in scope – all but five states saw increases in the percentage of investor purchases among all home sales from Q3 2020 to Q3 2021. Alaska, Delaware, Iowa, Nebraska and Vermont were the only states to show a decrease in real estate investor purchases during that period.

“The share of investor purchases continues to rise in the vast majority of states,” RealtyTrac Executive Vice President Rick Sharga said in the release. “Despite historically low inventory of homes for sale, and historically high prices, both fix-and-flip and rental property investors continue to be very active in the residential market.”

The top 10 states with highest RE investor purchase share were Arizona  (26.6 percent), Georgia (25.2 percent), Arkansas (23.5 percent), Florida (23.1 percent), Mississippi 22.7 percent), Nevada (22.1 percent), North Carolina (21.8 percent),   New Hampshire (21.2 percent),              Missouri (19.7 percent) and Delaware (18.5 percent), according to ATTOM Data Solutions, Realty Trac analysis.        

The states with the lowest RE investor purchase share were Vermont (0.5 percent), Alaska (1.3 percent),     South Dakota     (7.1 percent), New Mexico (7.4 percent), Montana (8.1 percent),              Idaho (8.3 percent), Wyoming (8.5 percent), Oregon (9.0 percent), West Virginia (9.5 percent) and Washington (9.7 percent).       

The RealtyTrac report, citing home sales data from ATTOM Data Solutions, also shows that investors across the country paid an average of 18.9 percent less than the overall median sale price in Q3 2021, with a median purchase price of $245,000 for investors compared with $302,000 for all home purchases. This average price discount is significantly lower than the discount in Q2 2021 when investors paid an average of 29.4% less.

The states with the highest average price discounts for investor properties as of Q3 2021 include Arkansas (7 percent); discount West Virginia (0 percent0; Michigan (5 percent); Louisiana (5 percent); and Delaware (9 percent).

Investors continue to pay with cash in a majority of cases, with the share of all-cash purchases among investors increasing. In Q3 2021, 79 percent of all investor purchases were cash sales compared with 69.5 percent in Q3 2020, a year-over-year increase of 9.5 percent. Cash purchases accounted for more than 50 percent of all investor purchases in every state, other than Alaska, Wyoming and the District of Columbia.

“As mortgage rates rise, investors benefit even more by being able to execute all-cash purchases,” Sharga said. “Rising home prices and inflation make it difficult for investors to achieve their ROI (return on investment) objectives, but they make it even harder for the average consumer to afford to buy a property. So even though investor profit margins may be declining, it’s possible that we’ll continue to see the investor share of purchases increase over the next few quarters.”