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Yahoo
15-07-2025
- Business
- Yahoo
Zacks Industry Outlook Highlights Annaly Capital Management, Dynex Capital and Ellington Financial
Chicago, IL – July 15, 2025 – Today, Zacks Equity Research discusses Annaly Capital Management NLY, Dynex Capital, Inc. DX and Ellington Financial LLC EFC. Link: The Zacks REIT and Equity Trust industry is facing volatility in mortgage rates due to macroeconomic uncertainty. With rates likely to remain relatively higher, the industry players will continue to face earnings pressure in the near term. However, despite ongoing affordability challenges in the housing market, purchase originations and refinancing activities are witnessing an improving trend. With this, companies like Annaly Capital Management, Dynex Capital, Inc. and Ellington Financial LLC are well-poised to navigate industry challenges. The Zacks REIT and Equity Trust industry comprises mortgage REITs, also known as mREITs. Industry participants invest in and originate mortgages and mortgage-backed securities (MBS), and provide mortgage credit for homeowners and businesses. Typically, these companies focus on either the residential or commercial mortgage markets. Some invest in both markets through asset-backed securities. Agency securities are backed by the federal government, making them safer bets and limiting credit risks. Such REITs raise funds in the debt and equity markets through common and preferred equity, repurchase agreements, structured financing, convertible and long-term debt, and other credit facilities. The net interest margin (NIM), the spread between interest income on mortgage assets and securities held, as well as funding costs, is a key revenue metric for mREITs. Industry Resorts to Dividend Cuts as Book Values Erode:Volatility in the mortgage markets, relatively high interest rates and the widening of the spread between the 30-year Agency MBS and 10-year treasury rate are affecting valuations of Agency mortgage-backed securities. As such, agency mortgage REITs are witnessing slight tangible book value decreases as spreads on benchmark indices have widened, but have been more stable than the volatility in 2023. Though the central bank lowered interest rates by 100 basis points in 2024, it has kept them steady since then, given uncertainty related to tariffs and their impact on the economy and inflation. This will increase earnings pressure for highly leveraged mREITs. This scenario compels industry players to reduce the dividend to a level that can be covered by earnings. This may result in capital outflows from the industry, resulting in greater book value declines for companies in the near term. Conservative Approach to Impede Returns:The scenario in mortgage markets, uncertain financial conditions and resultant lower fixed-income fund flows have strained credit-risky assets. Given this, mREITs are likely to be selective in their investments, resulting in lower portfolio growth. Also, numerous industry players have resorted to a higher hedge ratio to reduce interest rate risks. While such moves may seem prudent in the ongoing uncertain times, they will impede growth. As companies prioritize risk and liquidity management over incremental returns, at least in the short term, robust returns are expected to remain elusive. Relatively Lower Mortgage Rate to Aid Loan Demand: Despite interest rate cuts by the Federal Reserve in 2024, mortgage rates are not witnessing a significant decline but are relatively lower than last year. As such, purchase applications and refinancing activities are showing signs of improvement, indicating some latent demand in the market. With improving demand for originations and refinancing, operational and financial challenges for mREIT industry players will decline, increasing the gain on sale margin and investment activities. The Zacks REIT and Equity Trust industry is housed within the broader Zacks Finance sector. It carries a Zacks Industry Rank #162, which places it in the bottom 34% of 246 Zacks industries. The group's Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates underperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. The industry's positioning in the bottom 50% of the Zacks-ranked industries is an outcome of the negative earnings outlook for the constituent companies. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group's earnings growth potential. The industry's current-year earnings estimate moved 6.5% down over the last year. Before we present a few stocks that you may want to consider for your portfolio, let us take a look at the industry's recent stock-market performance and valuation picture. The Zacks REIT and Equity Trust industry has underperformed the broader Zacks Finance sector and the S&P 500 composite in the past year. The industry has gained 2.7% in the above-mentioned period compared with the broader sector's rise of 18.7%. Further, the S&P Index has grown 12.5% over the past year. Based on the trailing 12-month price-to-book (P/BV), which is a commonly used multiple for valuing mREITs, the industry is trading at 1.00X compared with the S&P 500's 8.42X. In the past five years, the industry has traded as high as 1.06X, as low as 0.70X and at the median of 0.90X. As finance stocks typically have a low P/BV ratio, comparing REIT and Equity Trust with the S&P 500 might not make sense to many investors. A comparison of the group's P/BV ratio with that of the broader sector ensures that the group is trading at a solid discount. The Zacks Finance sector's trailing 12-month P/BV came in at 4.26X. This is above the Zacks REIT and Equity Trust industry's ratio. Annaly:The company's investment strategy is driven by the prudent selection of assets and effective capital allocation to achieve stable returns. Its investment strategy involves traditional Agency MBSs, which provide downside protection and investments in more non-agency and credit-focused asset classes that enhance returns. Also, a scaled MSR platform will continue to benefit from a low prepayment environment. The company is focusing on improving its capabilities by acquiring newly originated MSRs from its partner network, which will continue to provide a strong advantage in expanding its MSR business. As of March 31, 2025, its investment portfolio aggregated $84.9 billion. NLY's diversified investment strategy will likely be a key contributor to long-term growth and stability. By diversifying its investments across the mortgage market, the company is better positioned to capitalize on opportunities as they occur in multiple areas while limiting the risks associated with overexposure to any particular location. The company's 2025 earnings have been unchanged at $2.87 per share over the past month. It indicates a year-over-year rise of 6.3%. NLY currently has a Zacks Rank of #3 (Hold) and a market capitalization of $11.6 billion. Dynex Capital: This is a mortgage and consumer finance company that uses its loan production operations to create investments for its portfolio. Currently, the company's primary production operations include the origination of mortgage loans secured by multi-family properties and the origination of loans secured by manufactured homes. The company has recently expanded its production activities to include commercial real estate loans and plans to expand into other financial products going forward. DX uses certain derivative instruments ("interest rate hedges") to hedge exposure to interest rate risks arising from its investment and financing portfolio. The company's interest income continues to increase, driven by its purchases of higher-coupon investments in the past year. Also, expected Fed rate cuts later this year will support its interest income. The company's 2025 earnings estimates have been unchanged at $1.97 per share over the past month. It indicates a year-over-year jump of 662.9%. DX has a Zacks Rank of #3 at present and a market capitalization of $1.37 billion. Ellington Financial: The company invests in a diverse array of financial assets. These include residential and commercial mortgage loans and mortgage-backed securities, consumer loans, and asset-backed securities. The assets are supported by consumer loans, collateralized loan obligations, non-mortgage and mortgage-related derivatives, equity investments in loan origination companies, and other strategic investments. EFC is well-positioned to weather volatility in the mortgage market, supported by its diversified exposure across residential and commercial mortgage loan portfolios and strong momentum in its securitization platform. The company's loan originations, especially in commercial mortgage bridge loans, proprietary reverse mortgages and closed-end second lien loans, continue to contribute to stable growth and income. To navigate market uncertainty, Ellington Financial is actively leveraging dynamic hedging strategies, maintaining a broad and balanced portfolio, securing multiple sources of financing, and operating with low leverage. These measures reflect a disciplined approach to risk management and a commitment to preserving book value while adapting to shifting market conditions. The company's 2025 earnings estimates have been unchanged at $1.65 per share over the past month, indicating year-over-year growth of 13%. EFC has a Zacks Rank of #2 (Buy) at present and a market capitalization of $1.25 billion. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Research Chief Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months. Free: See Our Top Stock And 4 Runners Up Join us on Facebook: Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates. Media Contact Zacks Investment Research 800-767-3771 ext. 9339 support@ Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ellington Financial Inc. (EFC) : Free Stock Analysis Report Annaly Capital Management Inc (NLY) : Free Stock Analysis Report Dynex Capital, Inc. (DX) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
09-07-2025
- Business
- Yahoo
Mortgage and refinance interest rates today, July 9, 2025: Higher on longer-term loans, unchanged on shorter
Mortgage interest rates are mixed today, with a bump higher on longer-term rates and no change on the shorter. According to Zillow, the average 30-year fixed rate rose nine basis points to 6.71%. The 15-year mortgage remained steady at 5.83%. Following last week's positive jobs report, bond traders have been readjusting their bearish positions. That has moved yields higher, including on the 10-year Treasury, a benchmark for mortgage rates. However, mixed sentiment is the enemy of momentum, and Wall Street is scrambling to decode the various signals between possible future interest rate cuts — and Trump tariffs. As a result, the bond market and mortgage rates are likely to be choppy this week. Read more: Housing costs are still the stickiest part of an otherwise cool inflation report Here are the current mortgage rates, according to the latest Zillow data: 30-year fixed: 6.71% 20-year fixed: 6.31% 15-year fixed: 5.83% 5/1 ARM: 7.68% 7/1 ARM: 7.45% 30-year VA: 6.21% 15-year VA: 5.61% 5/1 VA: 6.38% Remember, these are the national averages and rounded to the nearest hundredth. Learn more: Here's how mortgage rates are determined These are today's mortgage refinance rates, according to the latest Zillow data: 30-year fixed: 6.78% 20-year fixed: 6.37% 15-year fixed: 5.98% 5/1 ARM: 7.72% 7/1 ARM: 7.58% 30-year VA: 6.22% 15-year VA: 5.94% 5/1 VA: 6.33% Again, the numbers provided are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than rates when you buy a house, although that's not always the case. Use the mortgage calculator below to see how various interest rates and loan amounts will affect your monthly payments. It also shows how the term length plays into things. To dive deeper, use the Yahoo Finance mortgage calculator, which includes homeowners insurance and property taxes in your monthly payment estimate. You even have the option to enter costs for private mortgage insurance (PMI) and homeowners' association dues if those apply to you. These details result in a more accurate monthly payment estimate than if you simply calculated your mortgage principal and interest. There are two main advantages to a 30-year fixed mortgage: Your payments are lower, and your monthly payments are predictable. A 30-year fixed-rate mortgage has relatively low monthly payments because you're spreading your repayment out over a longer period of time than with, say, a 15-year mortgage. Your payments are predictable because, unlike with an adjustable-rate mortgage (ARM), your rate isn't going to change from year to year. Most years, the only things that might affect your monthly payment are any changes to your homeowners insurance or property taxes. The main disadvantage to 30-year fixed mortgage rates is mortgage interest — both in the short and long term. A 30-year fixed term comes with a higher rate than a shorter fixed term, and it's higher than the intro rate to a 30-year ARM. The higher your rate, the higher your monthly payment. You'll also pay much more in interest over the life of your loan due to both the higher rate and the longer term. The pros and cons of 15-year fixed mortgage rates are basically swapped from the 30-year rates. Yes, your monthly payments will still be predictable, but another advantage is that shorter terms come with lower interest rates. Not to mention, you'll pay off your mortgage 15 years sooner. So you'll save potentially hundreds of thousands of dollars in interest over the course of your loan. However, because you're paying off the same amount in half the time, your monthly payments will be higher than if you choose a 30-year term. Dig deeper: 15-year vs. 30-year mortgages Adjustable-rate mortgages lock in your rate for a predetermined amount of time, then change it periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then goes up or down once per year for the remaining 25 years. The main advantage is that the introductory rate is usually lower than what you'll get with a 30-year fixed rate, so your monthly payments will be lower. (Current average rates don't reflect this, though — fixed rates are actually lower. Talk to your lender before deciding between a fixed or adjustable rate.) With an ARM, you have no idea what mortgage rates will be like once the intro-rate period ends, so you risk your rate increasing later. This could ultimately end up costing more, and your monthly payments are unpredictable from year to year. But if you plan to move before the intro-rate period is over, you could reap the benefits of a low rate without risking a rate increase down the road. Learn more: Adjustable-rate vs. fixed-rate mortgage The national average 30-year mortgage rate is 6.71% right now, according to Zillow. But keep in mind that averages can vary depending on where you live. For example, if you're buying in a city with a high cost of living, rates could be even higher. Mortgage rates will likely remain in a tight range over the next few months. There are many questions regarding the economy, inflation, and the job market. Don't look for big moves in interest rates unless bad economic news develops. Not significantly. Mortgage rates continue to be about where they were one year ago. In many ways, securing a low mortgage refinance rate is similar to when you bought your home. Try to improve your credit score and lower your debt-to-income ratio (DTI). Refinancing into a shorter term will also land you a lower rate, though your monthly mortgage payments will be higher.
Yahoo
09-07-2025
- Business
- Yahoo
Mortgage and refinance interest rates today, July 9, 2025: Higher on longer-term loans, unchanged on shorter
Mortgage interest rates are mixed today, with a bump higher on longer-term rates and no change on the shorter. According to Zillow, the average 30-year fixed rate rose nine basis points to 6.71%. The 15-year mortgage remained steady at 5.83%. Following last week's positive jobs report, bond traders have been readjusting their bearish positions. That has moved yields higher, including on the 10-year Treasury, a benchmark for mortgage rates. However, mixed sentiment is the enemy of momentum, and Wall Street is scrambling to decode the various signals between possible future interest rate cuts — and Trump tariffs. As a result, the bond market and mortgage rates are likely to be choppy this week. Read more: Housing costs are still the stickiest part of an otherwise cool inflation report Here are the current mortgage rates, according to the latest Zillow data: 30-year fixed: 6.71% 20-year fixed: 6.31% 15-year fixed: 5.83% 5/1 ARM: 7.68% 7/1 ARM: 7.45% 30-year VA: 6.21% 15-year VA: 5.61% 5/1 VA: 6.38% Remember, these are the national averages and rounded to the nearest hundredth. Learn more: Here's how mortgage rates are determined These are today's mortgage refinance rates, according to the latest Zillow data: 30-year fixed: 6.78% 20-year fixed: 6.37% 15-year fixed: 5.98% 5/1 ARM: 7.72% 7/1 ARM: 7.58% 30-year VA: 6.22% 15-year VA: 5.94% 5/1 VA: 6.33% Again, the numbers provided are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than rates when you buy a house, although that's not always the case. Use the mortgage calculator below to see how various interest rates and loan amounts will affect your monthly payments. It also shows how the term length plays into things. To dive deeper, use the Yahoo Finance mortgage calculator, which includes homeowners insurance and property taxes in your monthly payment estimate. You even have the option to enter costs for private mortgage insurance (PMI) and homeowners' association dues if those apply to you. These details result in a more accurate monthly payment estimate than if you simply calculated your mortgage principal and interest. There are two main advantages to a 30-year fixed mortgage: Your payments are lower, and your monthly payments are predictable. A 30-year fixed-rate mortgage has relatively low monthly payments because you're spreading your repayment out over a longer period of time than with, say, a 15-year mortgage. Your payments are predictable because, unlike with an adjustable-rate mortgage (ARM), your rate isn't going to change from year to year. Most years, the only things that might affect your monthly payment are any changes to your homeowners insurance or property taxes. The main disadvantage to 30-year fixed mortgage rates is mortgage interest — both in the short and long term. A 30-year fixed term comes with a higher rate than a shorter fixed term, and it's higher than the intro rate to a 30-year ARM. The higher your rate, the higher your monthly payment. You'll also pay much more in interest over the life of your loan due to both the higher rate and the longer term. The pros and cons of 15-year fixed mortgage rates are basically swapped from the 30-year rates. Yes, your monthly payments will still be predictable, but another advantage is that shorter terms come with lower interest rates. Not to mention, you'll pay off your mortgage 15 years sooner. So you'll save potentially hundreds of thousands of dollars in interest over the course of your loan. However, because you're paying off the same amount in half the time, your monthly payments will be higher than if you choose a 30-year term. Dig deeper: 15-year vs. 30-year mortgages Adjustable-rate mortgages lock in your rate for a predetermined amount of time, then change it periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then goes up or down once per year for the remaining 25 years. The main advantage is that the introductory rate is usually lower than what you'll get with a 30-year fixed rate, so your monthly payments will be lower. (Current average rates don't reflect this, though — fixed rates are actually lower. Talk to your lender before deciding between a fixed or adjustable rate.) With an ARM, you have no idea what mortgage rates will be like once the intro-rate period ends, so you risk your rate increasing later. This could ultimately end up costing more, and your monthly payments are unpredictable from year to year. But if you plan to move before the intro-rate period is over, you could reap the benefits of a low rate without risking a rate increase down the road. Learn more: Adjustable-rate vs. fixed-rate mortgage The national average 30-year mortgage rate is 6.71% right now, according to Zillow. But keep in mind that averages can vary depending on where you live. For example, if you're buying in a city with a high cost of living, rates could be even higher. Mortgage rates will likely remain in a tight range over the next few months. There are many questions regarding the economy, inflation, and the job market. Don't look for big moves in interest rates unless bad economic news develops. Not significantly. Mortgage rates continue to be about where they were one year ago. In many ways, securing a low mortgage refinance rate is similar to when you bought your home. Try to improve your credit score and lower your debt-to-income ratio (DTI). Refinancing into a shorter term will also land you a lower rate, though your monthly mortgage payments will be higher.
CNET
09-07-2025
- Business
- CNET
Key Rates Move Higher for Homebuyers: Mortgage Interest Rates for July 9, 2025
Check out CNET Money's weekly mortgage rate forecast for a more in-depth look at what's next for Fed rate cuts, labor data and inflation. For a 30-year fixed-rate mortgage, the average rate you'll pay is 6.72% today, an increase of 0.03% compared to one week ago. The average rate for a 15-year fixed mortgage is 5.94%, which is an increase of 0.05% since last week. To secure a lower mortgage interest rate, consider increasing your down payment, improving your credit score or purchasing mortgage points. What's behind high rates these days? Stubborn inflation, threats of a global trade war and policy turbulence have created an uncertain economic outlook. In response, the Federal Reserve has adopted a wait-and-see approach and left interest rates unchanged this year. Most economists predict the Fed will start lowering rates in September. If President Trump eases some of his aggressive tariff measures or if the labor market continues to deteriorate, the Fed might cut interest rates earlier, potentially as soon as late July. Prospective homebuyers shouldn't bank on mortgage rates becoming affordable overnight. While cheaper borrowing costs gradually trickle down to the housing market, the Fed doesn't directly set lenders' mortgage rates. In today's unaffordable housing market, mortgage rates are just one piece of the puzzle. High home prices and skyrocketing homeownership expenses, like insurance and property taxes, are further compounding the pressure on prospective buyers. The possibility of a job-loss recession is also pushing many households to tighten their budgets and take on less financial risk. When mortgage rates start to fall, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest rate. Enter your information here to get a custom quote from one of CNET's partner lenders. About these rates: Bankrate's tool features rates from partner lenders that you can use when comparing multiple mortgage rates. Are mortgage rates considered high right now? With mortgage rates stuck above 6.5%, it's not shaping up to be a hot summer housing market. Mortgage rates are closely tied to the bond market, specifically the 10-year Treasury yield, which responds to investors' expectations for inflation, labor data, changes to monetary policy and global measures like tariffs. "Rates could fall if inflation keeps cooling and the labor market softens," said Jeb Smith, licensed real estate agent and member of CNET Money's expert review board. "On the other hand, tariffs could create new inflation pressure. Add in government deficits and increased bond supply, and that puts upward pressure on rates." Even as the Fed eventually starts to lower interest rates, experts warn of a lot more volatility in the market. As a result, homebuyers are being more patient and strategic about financing, comparing different loan types and planning ahead. "Some are waiting, others are getting pre-approved now so they're ready to act if rates fall," said Smith. For a look at mortgage rate movement in recent years, see the chart below. Mortgage predictions for 2025 Despite hopes that 2025 would bring relief to the housing market, economic and political instability have kept it stuck in neutral. Median family income has not kept pace with the surge in housing costs, requiring many households to earn double or triple their salary to afford a modest home in some cities. Mortgage rates would have to take a big step down, close to 6% or below, to drum up significant homebuying demand. But according to Smith, the more likely scenario is a slow and steady decline in borrowing costs. A return to the record-low rates, around 2-3%, we saw during the pandemic would only happen if the economy tipped into a severe recession. Fannie Mae now expects rates around 6.5% by the end of 2025 and 6.1% by the end of 2026. Numerous risks could keep rates elevated. For instance, if tariffs cause inflation to reignite, which most experts and Fed officials expect, it could result in higher bond yields and fewer interest rate cuts by the central bank. Both would be bad for mortgage rates. What are the different mortgage types? Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the duration of the loan, offering stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront. 30-year fixed-rate mortgages The average 30-year fixed mortgage interest rate is 6.72% today. A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you'll have a lower monthly payment. 15-year fixed-rate mortgages Today, the average rate for a 15-year, fixed mortgage is 5.94%. Though you'll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner. 5/1 adjustable-rate mortgages A 5/1 ARM has an average rate of 5.90% today. You'll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option. Calculate your monthly mortgage payment Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET's mortgage calculator below can help homebuyers prepare for monthly mortgage payments. How can I find the best mortgage rates? Though mortgage rates and home prices are high, the housing market won't be unaffordable forever. It's always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right. Save for a bigger down payment: Though a 20% down payment isn't required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest. Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates. Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments. Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs. Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.
Fast Company
08-07-2025
- Business
- Fast Company
With prices skyrocketing, investors are snapping up U.S. homes. That's bad news for the average buyer.
Real estate investors are snapping up a bigger share of U.S. homes on the market as rising prices and stubbornly high borrowing costs freeze out many other would-be homebuyers. Nearly 27% of all homes sold in the first three months of the year were bought by investors—the highest share in at least five years, according to a report by real estate data provider BatchData. Between 2020 and 2023, the share of homes bought by investors averaged 18.5%. All told, investors bought 265,000 homes in the January-March quarter, an increase of 1.2% from the same period a year earlier, the firm said. Despite the modest annual increase, the rise in the share of investor home purchases is more a reflection of how much the housing market has slowed as traditional buyers face growing affordability constraints, according to BatchData. The U.S. housing market has been in a sales slump since early 2022, when mortgage rates began to climb from pandemic-era lows. Home sales fell last year to their lowest level in nearly 30 years. They've remained sluggish so far this year, as many prospective homebuyers have been discouraged by elevated mortgage rates and home prices that have kept climbing, though more slowly. As home sales have slowed, properties are taking longer to sell. That's led to a sharply higher inventory of homes on the market, benefitting investors and other home shoppers who can afford to bypass current mortgage rates by paying in cash or tapping home equity gains. 'As traditional buyers struggle with affordability, investors with cash and financing advantages are stepping in to maintain transaction volume,' according to the report. BatchData analyzes U.S. home sales records to determine which properties were purchased by investors. These could include vacation homes or rentals, but not a homebuyer's primary residence. Investors bought 1.2 million homes in 2024, up from an average of 1.1 million homes a year going back to 2020, according to BatchData. Even so, investor-owned homes account for roughly 20% of the nation's 86 million single-family homes, the firm said. Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% of all investor-owned residential properties, while those with between 6 and 10 properties account for another 5%. Institutional investors that own 1,000 or more homes account for only about 2.2% of all investor-owned homes, the firm said. And that number could get smaller, amid signs that large institutional investors are scaling back home purchases. Out of a group of eight of the biggest companies that own and lease single-family houses, including Invitation Homes and American Homes 4 Rent, six sold more homes in the second quarter than they bought, according to data from Parci Labs.
