IRVINE, Calif.—During April median investment home prices, which include financed and non-financed properties, soared 12.5% to $203,000, while owner-occupied median home prices rose 5.3% to $251,900, according to new data released by HomeUnion.
The most dramatic increase was seen in the all-cash, non-owner-occupied segment of the housing market, where median prices jumped 19.3% to $181,000, the company said.
“Uneasiness in the equity markets helped support a surge in investment home prices last month,” said Steve Hovland, director of research for HomeUnion, in a statement. “Year over year, prices for cash investment sales jumped more than 19% as portfolios were reallocated at investors hedged against stocks. Cap rates for all-cash sales last month reflected investors’ willingness to accept lower, but still significant yields.”
Here’s how the investment sector of the housing market compares to the owner-occupied sector:
Owner-occupied homes also recorded a substantial year-over-year gain in prices, HomeUnion said.
“Several economic factors combined to support price growth, including an uptick in wages, strong job growth in the first quarter and historically low interest rates. An unexpected spike in consumer sentiment and healthy auto sales provides further evidence that Americans feel confident enough to purchase homes,” said Hovland. “Looking ahead, May home sales are expected to remain healthy after strong language in the Fed minutes indicated an interest rate hike in June is firmly on the table. The potential for rising mortgage rates could compel some buyers to act sooner to secure mortgages prior to the June announcement.”