Ask the typical buyer who was looking for a home this year and you will likely hear that it was absolutely impossible to break into the real estate market. The housing stock has been extremely low for months and that, combined with the low mortgage rates, has created a lot of competition. This, in turn, has caused home prices to skyrocket, leaving buyers with no choice but to either get stuck, save, or take out much larger mortgages than they want.

But it's not just that regular buyers compete for homes. You also have to compete with real estate investors – people who buy houses not to use but to rent out to tenants over the long term or short term.

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Investors take inventory

In the second quarter of 2021, real estate investors bought 67,943 homes, according to Redfin. This is an increase from 59,017 apartments in the first quarter and 32,873 in the previous year.

Real estate investors often have the benefit of having access to more money than regular buyers (especially as they typically tap equity from their existing homes or have the option to refinance their existing mortgages and pull cash from their properties to new ones Houses). The result? You can bid higher and have the flexibility to pay more when houses get into bidding wars.

The good news is that the housing stock rose slightly in June. Realtor.com reports that new listings increased 5.5% from June 2020 and 10.9% from May. But there is still a huge shortage of available homes compared to the number of people looking to buy one. And that, combined with increased competition from investors, has made it very difficult for the average buyer.

Is it worth waiting to buy?

The typical buyer trying to buy a home in the near future is likely to face limited choices, fierce competition, and inflated prices. As such, it might be beneficial for buyers to hold off their home hunting for at least a few more months and see if more inventory is added. In fact, some buyers may want to wait until 2022 to start looking again.

Of course, once there are more homes to choose from for both regular buyers and investors, prices should come down as supply catches up with demand. But that's unlikely to happen very soon, and it may not happen before the end of the year.

The good news is that mortgage rates are likely to stay low well into 2022 and possibly all year round. This means that today's tenacious buyers don't have to worry about missing out on the opportunity to get an affordable home loan. While mortgage rates may be low today, home prices are far from different and buyers who choose to wait could save themselves big bucks.

source https://seapointrealtors.com/2021/07/25/investors-scooped-up-more-homes-than-ever-in-2021s-second-quarter-shutting-regular-buyers-out/

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