Study: Corporate landlords gobble up Wichita Falls housing

Landlords and investors have gorged on the housing market in Wichita Falls at the expense of individual homebuyers, according to a new study by Stessa, a San Francisco company that serves rental property owners.

The study shows that while nationally 8.5 percent of all mortgage loans in 2020 went to landlords, the figure for Wichita Falls was almost triple -- 24 percent.

“While many prospective homebuyers were drawn into the market with historically low interest rates … they have frequently found themselves outbid by corporate landlords and investment firms,” Stessa said in a news release. “Out of all small U.S. metros, the Wichita Falls metro has the 6th highest percentage of investment property loans,” the company said. The study does not include landlords who paid cash for properties but does include local landlords as well as corporate investors who took out mortgages.

Wichita Falls’ lure was its bargain basement prices compared to the much of the rest of the country. The study shows the median value for investment properties here was $95,000 compared to the national average of $235,000.

Financing a rental property here also required a relatively small down payment -- $20,000 compared to the national average of $60,000. The average interest rate is higher, though – 4.8 percent compared to the national average of four percent.

"Between appreciation in home values and steady income from rents, residential real estate has proven to be an attractive asset class for major investors," Stessa said.

Wichita Falls homeowners saw dramatic increases in their home values over the past couple of years, fueled by low interest rates and a buying frenzy that often saw buyers bidding above the asking prices. The average values went up a whopping 25 percent this year. Lisa Stephens-Musick, chief appraiser for the Wichita Appraisal District called that jump "unprecedented." Still, home values here were lower than elsewhere, luring in corporate landlords.

The small metros with a higher percentage of loans to landlords than Wichita Falls were Lawton; Jonesboro, AR; Lubbock; Valdosta, GA and Clarksville, TN-KY.

The data used in the analysis was from the Federal Financial Institutions Examination Council (FFIEC) and was based on Home Mortgage Disclosure Act filings. Only conventional home purchase loans approved in 2020 were considered.

This article originally appeared on Wichita Falls Times Record News: Study: Corporate landlords gobble up Wichita Falls housing