All-Cash Investment Home Prices Increased 21.2% Year Over Year In August

The all-cash segment of the single-family rental (SFR) market sector grew dramatically year over year in August, according to HomeUnion’s monthly home sales report.

In addition, the average price for an SFR property increased to about $186,500, up 21.2% from August last year.

The combined average price for investment homes and owner-occupied homes in August was $266,500, an increase of 12.6% from August 2015, the report shows.

“Anyone taking out a mortgage, including SFR investors, will be able to leverage properties at historically low rates,” said Steve Hovland, director of research for HomeUnion. “Mortgages on those assets, meanwhile, can be covered by rising rents. This explains both the recent surge in activity among investors acquiring SFRs and last month’s continued price growth for owner-occupied housing.

“Since a move from the Fed is unlikely until the December meeting, we expect investors to expand their portfolios further through the end of 2016 as the competition prevalent in the summer buying season fades,” Hovland added. “However, lenders will begin lifting rates well in advance of the December Fed meeting, so we expect interest rates to inch higher through year-end.”


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