A new study confirms the big role investors, including "house flippers," played in Nevada’s home price run-up and its subsequent near collapse.

Researchers at the Federal Reserve Bank of New York last week reported that their study "revealed some astonishing facts" confirming that in four states hit hard by the real estate meltdown, investors played a disproportionate role in inflating prices to unsustainable levels.

Those states are Nevada, Arizona, California and Florida. Investors are those buying homes intending to rent them out and hoping prices rise over time — or those planning to simply "flip" houses, i.e. selling quickly and reaping a quick profit, the Fed report noted.

Keeping in mind that when home prices fall investors are more likely to default on mortgages than are owner-occupants, the Fed report found:

• At the peak of the boom in 2006 and 2007, about 35 percent of U.S. new-purchase mortgage loan dollars were going to people who already owned at least one house. In Nevada and the three other hard-hit states, that percentage was about 45 – up from about 25 percent in 2000.

• Investors owning three or more properties were responsible for 20 percent of loan originations in 2006 in Nevada and the three other hard-hit states, almost triple their share in 2000.

• Investors nationwide were more likely than owner-occupants to have received nonprime loans, or loans with low down payments and high interest rates. About 25 percent of such borrowing nationwide at the end of 2006 involved borrowers with three or more properties vs. 35 percent in Nevada and the three other hard-hit states.

The collapse of the housing bubble, as expected, then led investors to default at high rates both nationwide and in the hard-hid states, the study found.

By the fourth quarter of 2008, investors’ share of seriously delinquent mortgage balances was about 31 percent nationwide vs. about 36 percent in Nevada and the three other hard-hit states, the report found.

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