According to Acom Capital , the housing market could see a wave of much-needed inventory in the coming years, thanks to 24 million homes entering the prime age for renovation, which is becoming more popular among fix-and-flip investors . Presents an opportunity for.
Acom Capital said a turnaround in the U.S. housing market could begin next year and continue through 2027, thanks to a broader market of homes available to real estate investors looking to buy older homes and put them back on the market. Focuses on refurbishing them to bring.
It appears that home flipping is already on the rise in some parts of America. The firm said Acom Capital investor activity in cities such as Houston, Texas, Raleigh, North Carolina and Atlanta, Georgia was up more than 20% in the second half of the year compared to the first half.
“The steady pace of what we like to call The Great Renovation will continue through 2024. Major remodels for homes will increase through the year 2027, with 24 million homes ready for major renovation,” New Western said in a recent report.”
This could be good news for the housing market, which has struggled with a shortage of inventory amid high mortgage rates over the past year. Rates have come down from recent highs, but homeowners are still hesitant to give up the ultra-low rates at which they financed their homes years ago.
Over 90% of American homeowners with mortgages are financed at rates below 6%. Meanwhile, the housing market had just 1.5 million homes for sale in October — a decline of nearly 34% from October 2018, when inventory clocked in at 2.3 million, Redfin data shows.
However, markets are feeling more positive that inventory levels will improve in 2024. The National Association of Homebuilders is projecting a 5% increase in home construction starting next year. Fix-and-flip investors will also be an important resource in increasing the supply of homes, New Western said.
“Demand for new homes is high but lead times are long and only a small percentage of new homes are being built in the affordable range. Builders are certainly a solution but the independent investor is a neglected resource and often has to contend with it. falls under stringent rules as builders,” the report said.
More inventory added to the housing market could be key in making housing more affordable, as tight supply has pushed prices higher in the past year. Redfin data shows the average U.S. home price has reached $413,000, nearly double the $278,000 price recorded five years ago.
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