HomeUnion: Home Price Appreciation Is Flattening, But Investment Homes Are The Exception

U.S. home price appreciation is flattening, but investment homes are the exception, a recent report from real estate investment management firm and data provider HomeUnion shows.

According to the firm’s research, the median price for an owner-occupied home decreased 1.1% to $234,300 in March. Meanwhile, the median price for a non-owner-occupied home, or investment home, increased 8.5% to $192,600.

“We are seeing a degree of volatility in the traditional housing market, especially on a regional level,” says Steve Hovland, director of research for HomeUnion, in a statement. “We expect price growth for owner-occupied homes to be tempered, even as we enter the typically frenzied spring home buying season. Housing affordability has pushed beyond incomes in many areas of the country, limiting demand at today’s prices despite low interest rates.

“March home price figures highlight the attractiveness of single-family rental investment homes in an uncertain environment,” Hovland notes. “Since last August, when volatility set into the global stock markets, investors have been repositioning their portfolios to hedge against uncertainty and find stable yields. We’re seeing that demand translate into higher investment home prices.

“At this stage in the cycle, purchasing a fully managed investment home or portfolio of homes remotely could prove to be a better long-term investment than purchasing a home to occupy, depending on where that investment home is located,” he adds.

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