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Investor Share of Home Purchases Continues to Tick Up

NEW YORK (TheStreet) -- Investors increased their share of the home purchase market in November, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking survey.

The share of homes purchased by investors rose to a three-month high of 18.8%. This is based on a three-month moving average, which means it captures data over three months.

While the share is below the near-record levels of 23% seen earlier this year, it appears that investor activity has rebounded in recent months. The share of investor purchases was 16.6% in August, a two-and-a-half year low.

A recent RealtyTrac survey put the share of all-cash home buyers at 42% in November. Institutional investors, defined as those who bought at least 10 properties in the past year, accounted for about 8% of all transactions.

Investors led by big private equity players such as Blackstone (BX - Get Report) helped kick-start the housing recovery in 2012, as they swooped in to buy distressed properties at deep discounts to market prices, helping to reduce the excess supply in the market.

But although home prices have recovered, the continued presence of larger, cash-rich investors in the market have squeezed out traditional first-time home buyers and homeowners who wish to trade-up. 

Those investors continue to be the biggest purchasers of foreclosed homes, accounting for 57.6% of all sales in November. The share of distressed properties ticked up in November, explaining some of the heightened investor activity.

But it turns out that investors are making their biggest market-share gains in the conventional housing market.

In November, investors accounted for 13.2% of purchases of non-distressed properties based on a three-month moving average. This was up from 10.5% in August.

"There has been a clear rebound in investor participation in the housing market," said Thomas Popik, research director for the HousingPulse survey. "The statistics for the housing market, particularly the non-distressed segment, remain generally strong, but investors still are increasing their activity."

-- Written by Shanthi Bharatwaj in New York

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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