As Investors Retreat, Home Values Stall

Written By: Emil FleysherOctober 10, 2014,

The increase in home prices has begun to slow down due to less interest from investors. On a seasonally adjusted basis, during the month of June, property prices only rose 0.1 percent, according to the Federal Housing Finance Agency; as opposed to the estimated 0.5 percent that data gathered by Bloomberg predicted. After helping to drive prices up, investors are now pulling back. They are doing this due to a decrease in foreclosures and other homes at reduced prices.

Cash purchases dropped to 23 percent in August. The usual percentage is around 33 percent, stated the National Association of Realtors. Investors tallied close to 12 percent of, the smallest amount since the end of 2009. Because prices have begun to escalate, the investors aren’t interested anymore. They are looking to buy properties at low prices and sell them for a profit. Sales for pre-owned homes have also dropped by 1.8 percent for August reported the Realtors group.

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