Investor purchases appear to have been behind some of the unusually high home price appreciation in parts of the United States over the past year, and those purchases may be leveling off, according to Fannie Mae."The pickup in the investor share has been greatest in some of the areas with the largest rise in home prices (e.g., Las Vegas, San Diego, Monterey)," Fannie Mae chief economist David Berson said in a report released Oct. 18. "When investors decide to leave the housing market (as they always do at some point), demand growth will slow (indeed, the level of demand could decline) and supply growth will rise (as investors put their properties on the market). We may be seeing the beginning of this today." Senior economist Orawin Velz told MortgageWire that the report was based on a comparison of home price appreciation data from the Office of Federal Housing Enterprise Oversight and data from San Francisco-based LoanPerformance Inc. on the investor share of purchase mortgage originations.

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