Real estate investors are buying increasing numbers of homes in the Midwest, new data shows.
Investors bought 14.8 percent of homes in the first quarter of 2024, according to the Realtor.com Q1 2024 Investment Report – the highest percentage recorded since the group began tracking in 2001.
Missouri is the most active market, with three cities ranking in the top five for investor purchase participation.
In Springfield, investors purchased 20.5 percent (nearly 1 in 5) of the homes. In Kansas City, 20.1 percent and in St. Louis, 18.9 percent of the purchases were made by investors.
“Investors are generally the first to exit the market, as we’ll see in 2023, as well as the first to re-enter, as we’re seeing signs of now,” said Realtor.com senior economic research analyst Hannah Jones.
Missouri is the most attractive market for investors, with three cities (including St. Louis (pictured)) ranking in the top five for the highest proportion of investor purchases.
‘More buyers may choose to invest in affordable markets that need more rental inventory to ensure a steady stream of rental income.’
Rounding out the top five are investors making 18.7 percent of purchases in Birmingham, Alabama, and 18.2 percent in Memphis, Tennessee.
Retail investors accounted for the largest share of purchases since the firm began tracking them, accounting for 62.2 percent of investor purchases from January to March 2024.
Americans are drawn to the Midwest because of its relatively affordable properties, especially as home prices elsewhere in the United States skyrocket.
The Midwest is also less vulnerable to natural disasters: Surveys show that wildfires, tornadoes, floods and hurricanes are growing concerns for homebuyers.
The median home price in Springfield is $280,000, in Kansas City it is $285,000 and in St. Louis it is $207,500 according to Realtor.com.
In Kansas City (pictured), 20.1 percent of homes purchased in the first quarter of 2024 were by investors.
Rents in the Midwest have risen due to strong job markets and increased demand that make purchasing homes in these areas desirable for investors.
A 2023 study by the Mid-America Regional Council found that of Kansas City’s 157,000 single-family rental homes, nearly 20 percent are owned by individuals or businesses with 10 or more properties.
Thirty-three companies own nearly 14,000 homes in the Kansas City region, five of which own nearly 8,000 homes.
“(Investors) are intentionally targeting what were primarily ownership-based homes to convert them into rentals,” said Josh Akers, research manager for the Mid-America Regional Council. The lighthouse.
