24 Million Homes Offer Fix-and-Flip Opportunity, Anticipates Housing Market Influx
The housing market is poised for a potential transformation with an anticipated influx of up to 24 million homes reaching prime renovation age, opening doors for fix-and-flip investors, according to New Western.
This forecast suggests a significant shift in the US housing landscape extending from the upcoming year into 2027. New Western’s report highlights increased investor activity, particularly in cities like Houston, Raleigh, and Atlanta, where renovation-focused real estate endeavors have surged by over 20% in the latter half of the year compared to the first.
Expectations for a sustained trend in home refurbishments remain robust. New Western foresees a steady trajectory dubbed “The Great Renovation” continuing into 2024 and beyond, marking an era when 24 million homes will stand ripe for substantial revitalization efforts.
This potential surge in home refurbishment could potentially alleviate the persistent inventory shortage that has burdened the housing market over the past year amid elevated mortgage rates. Despite the cooling of recent rate highs, homeowners are reluctant to relinquish historically low mortgage rates that facilitated their home purchases.
The housing market’s scarcity has been evident, with just 1.5 million homes available for sale in October, marking a substantial 34% decrease from the inventory levels of October 2018, as per Redfin data. Forecasts signal a more optimistic outlook for 2024, with the National Association of Homebuilders projecting a 5% uptick in homebuilding starts. New Western emphasizes the pivotal role of fix-and-flip investors in expanding housing supply, particularly in addressing the shortfall of affordable homes.
Addressing the affordability crisis in housing remains a key goal, and an expanded inventory could play a crucial role in this endeavor. The relentless shortage has propelled median home prices in the US to $413,000, nearly double the $278,000 recorded just five years ago, according to Redfin data.