Home Flippers Saw Profits Rise In Q1 2024 But Face Headwinds

Home flippers raked in profits in Q1 2024 but face headwinds moving forward as buyer demand cools. ATTOM’s U.S. Home Flipping Report found that 67,817 single-family homes and condominiums were flipped in the first quarter, accounting for one of every 12 home sales (8.7%) across the country. This was up from 7.7% of all home sales in Q4 2023, and the second consecutive quarterly gain. Flipping rates were down YOY, however, from 9.8% in the first quarter of 2023. Overall, investors who buy and flip homes continue to profit from their work, clocking an average 30.2% gross profit before expenses on homes sold. This is the third quarter of profit margin gains out of the last four, marking a good…

Serious Delinquencies Improve, Foreclosure Starts Decline

April brought continued delinquency improvements, with serious delinquencies down to one of their best levels in nearly 20 years. That’s according to new data from ICE, which showed that the national delinquency rate fell to 3.09% in April, the second-lowest level ever recorded. This is only bested by March 2023’s low of 2.92%, and a 22 bps improvement YOY. Serious delinquencies (loans 90+ days past due but not in active foreclosure) fell to their lowest point since August 2005, down 4% from March and 16.8% YOY. At the same time, the number of 30-day delinquencies slipped to an 8-month low, while 60-day delinquencies outperformed the last 10 months. Foreclosure starts also declined 0.8% from March, leading to active foreclosures dipping…

Property Taxes, Insurance Costs Squeeze Homeowners

By ERIN FLYNN JAY Rising property taxes and insurance costs are putting pressure on homeowners across the country. Last week, Newsweek reported that polling conducted for them by Redfield & Wilton Strategies found that property taxes and/or insurance costs have risen for most homeowners within the past year. The poll found that 65% of Americans saw increased property taxes, while 69% paid more for home insurance. They surveyed 1,500 eligible voters on May 1, according to the report. In April, ATTOM released its property tax analysis for 89.4 million U.S. single-family homes, which showed that $363.3 billion in property taxes were levied in 2023, up 6.9% from $339.8 billion in 2022. The increase was almost double the 3.6% growth rate…

Foreclosures Up 3% In Q1 2024

Foreclosures increased nationwide in Q1 2024 as mounting affordability pressures push homeowners into situations where they are unable to pay their mortgages. According to ATTOM’s latest Foreclosure Market Report, a total of 95,349 U.S. properties had foreclosure filings during the first quarter. This is up 3% from Q4 2023, but down under 1% YOY. “Q1 2024’s foreclosure data reveals a market in transition, with slight increases in filings and starts, alongside a notable decrease in REO properties,” explained Rob Barber, CEO at ATTOM. “While foreclosures remain relatively stable, we’re closely monitoring these trends. Homeowners continue to hold significant equity, contributing to a persistently hot housing market.” REOs were up 7% from the previous quarter but plummeted by 20% YOY. Foreclosure…

Home Flippers Hit Hard By Interest Rates, Inflation

By ERIN FLYNN JAY Home flipping activity is down across the nation as people who work in the industry see reduced returns on investments due to high interest rates and inflation. Last month, ATTOM released its 2023 U.S. Home Flipping Report, which showed that 308,922 single-family homes and condos in the United States were flipped last year. That was down 29.3% from 436,807 in 2022 and is the largest annual drop since 2008. The report further revealed that as the number of homes flipped by investors declined, so did flips as a portion of all home sales, from 8.6% in 2022 to 8.1% percent last year. Rob Barber, ATTOM’s CEO, said high interest rates and inflation have elevated costs for…

Friends Are Buying Homes Together

By CHUCK GREEN They may not be your typical neighbors, but they could be moving next door soon: Friends who have carpooled their way into homeownership. According to a recent survey by JW Surety Bonds, nearly 15% of Americans have co-purchased a home with a person other than their romantic partner and another 48% would consider it. Just over a quarter (26%) of the individuals who co-purchased a home with a non-romantic partner said they bought it with a friend. Not surprisingly, young people are the most likely to consider this option. Gen Z would be the most willing to co-buy with a friend at 70%, with one in four Zoomers saying they believe co-buying a home can strengthen relationships.…

Renters Feel Bad About Their Finances, But It’s Cheaper Than Owning

By ERIN FLYNN JAY Compared to homeowners, renters feel bad about their finances, but in most of the country renting is the more affordable option right now. A recent Axios Vibes survey by The Harris Poll shows that homeowners are nearly twice as likely to say they are getting ahead financially when compared to renters. 57% of renters and 29% of homeowners described their financial situation as “poor.” According to Emily Peck, a markets correspondent at Axios, part of the problem is that the median asking rent in the U.S. is up 40% from the first quarter of 2020. With average hourly earnings rising only 20% during the same time period, wages did not keep up with costs. Homeowners were…

Investors Are Back, Buying 26% Of America’s Most Affordable Homes

With mortgage rates beginning to moderate, investors are back and snapping up the most wanted homes on the market. Investors bought 26% of America’s lowest-priced homes in Q4 2023, according to a new report from Redfin, a record-high share and up from 24% at the same time last year. By comparison, they bought 13.6% of mid-priced homes that sold and 15.9% of high-priced homes, both increases. Investors are more choosey now than they have been in recent memory, looking for lower-cost homes they can rent or flip for better profits. “I get tons of emails every day from investors looking for properties, but of course, they only want homes that are under market value, which are hard to come by.…

Will Profits Continue To Drop For Sellers?

By ERIN FLYNN JAY Gross profits and profit margins remained near record levels for sellers last year but they decreased for the first time since 2011 in what could be seen as a sign of a cooling housing market. ATTOM released its Year-End 2023 U.S. Home Sales Report on Jan. 24, which shows that home sellers made a $121,000 profit on the typical sale in 2023, generating a 56.5% return on investment. Compare that to 2022, when the gross profit on median-priced single-family homes was $122,600 and the profit margin was 59.8%. This drop in profits happened as the median nationwide home price rose at the smallest annual pace in more than a decade, according to ATTOM. So is this…

Foreclosures Up, Trending Back To Pre-Pandemic Levels

By ERIN FLYNN JAY Foreclosure numbers are up by double-digit numbers and industry leaders say they will continue to rise this year. Earlier this month, ATTOM, a curator of land, property, and real estate data, released its Year-End 2023 U.S. Foreclosure Market Report, which shows foreclosure filings — default notices, scheduled auctions, and bank repossessions — were reported on 357,062 U.S. properties in 2023, up 10% from 2022 and 136% from 2021. CEO Rob Barber told The Mortgage Note several elements may be contributing to the rise in foreclosures. “Key among them is the increase in interest rates, especially for adjustable-rate mortgages, leading to higher monthly payments for homeowners. Additionally, escalating unemployment rates are a concern,” Barber said. Barber said…