As Investors Retreat, Home Values Stall

Investors have moved on and the housing market is suffering the consequences.

The increase in home prices has begun to slow down due to less interest from investors. In 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 was predicted by data gathered by Bloomberg. After helping to drive prices up, investors are now pulling back 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 any more. 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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