The last, best hope for housing right now is robust investor activity; I've been saying that for years. Unfortunately, investors may be pulling back on the housing market, despite a surge in rental demand and prices.
The investor share of the home buyers fell to 19.6 percent in July according to one survey by Campbell/Inside Mortgage Finance, the lowest level in a year. The National Association of Realtors had it even lower at 18 percent. While the investor share is still high in the most distressed markets, like Miami and Phoenix, the fact that it's falling overall is a troubling sign, because investors have been a huge help in clearing distressed inventory.
"The inability of most investors to resell homes in the current housing environment has put a damper on their participation in the housing market this summer," the Campbell survey report. "Investors will ultimately rent out 48 percent of the properties acquired in the month of July 2011. A comparable figure for the month of July 2010 would have been investors renting out 28% of acquired properties."