Investor Intel: Rate Hikes, Rental Markets on the Rise and Declining Cash Sales
The specter of a Fed rate hike continues to linger, though experts expect that a hike may not happen until December. While a hike may have a slight impact on mortgage borrowers in the form of modestly higher payments (think a few dollars at most), the housing market has much bigger concerns: namely, supply. Inventory has been steadily falling, mostly in starter homes. For the single-family rental investor, this might mean fewer opportunities to buy, though higher-end homes are not having this issue. Check out our blog post on investing in high-end properties and decide for yourself if it’s worth it. CNBC also published an in-depth blog on what rates mean for the housing market, so click on over to learn more.
For an insightful run-down on what rental markets are performing well, look no further than recent data from RentRange. According to the report, The Sunshine State and the Golden State are driving some of the strongest rent increases on three-bedroom single-family properties in the country. Other strong markets included Seattle, Knoxville, Charleston and Pittsburgh, among others.
If you’re thinking of investing in these markets, put your checkbook away. According to CoreLogic, cash purchases are on the decline. According to the report, cash sales decreased in June, down 2.5 percentage points from last year and 0.9 percentage points from May to 29.3 percent. From the HousingWire story:
“The percentage of REO sales may be the most popular among all-cash sales, but it only makes of 4.9 percent of all home sales in June. When cash sales hit their peak in January 2011, REOs made up 23.9 percent of total home sales.
Resales usually make up the majority of sales, they hit 84 percent in June, and therefore have the greatest impact on the total cash sales share.
New York had the largest cash sales share of any state at 45.3 percent, followed by Alabama at 44.6 percent, Florida at 40.6 percent, Oklahoma at 38.6 percent, and Indiana 35.7 percent.”
As we head into the fall months, keep an eye on investment opportunities and prepare to get even chummier with your lender!
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