Investors have been the new, dominating economic force in residential real estate. In fact, they currently own the largest share of SFHs nationwide. Overall, IOH properties are most prevalent in Texas, California, and Florida. At the same time, Hawaii, Alaska, Montana and Maine top the list for share of such homes. There are as many as half a million small investors in the housing market with a lock on their place at the top of the investor pecking order.
Nationally in 2024, investors made up at least a quarter—about 25.7 percent—of all residential home sales. The good news is that, according to recent data, the overall number of homes being bought by investors is down. That’s right—in the second quarter of this year, investors purchased 16,000 fewer homes than they did in that same period last year. Small investors, those owning ten properties or fewer, continue to make up the majority of the market, even with the recent drop. They represent more than 90% of all single-family homes owned by investors.
Perhaps the most striking change has been the behavior of investors over the last few quarters. In fact, institutional investors have sold more homes than they have bought during the past six quarters in a row. During this period, these larger investors sold more than 104,000 homes, 45% of those transactions going to traditional homebuyers. Real estate analyst Ivo Draginov explains,
“While investors purchased more homes than they sold in the second quarter, they did sell over 104,000 homes, with 45% of those sales going to traditional homebuyers.”
At the same time, the average price of homes being purchased by investors has hit all-time highs. The average purchase price of all of these properties was $455,481, versus the national average home price of $512,800. This increase is part of a larger trend as investors continue to set their sights on more expensive, higher quality properties. Observable average institutional investor purchase price was $279,889 and sale price was $334,787.
In large institutional investors, those with 1,000 or more properties, financial acumen is on exhibition. They still only represent 2% of the whole investor-owned home market. These entities are disproportionately located in areas of the country with low or below-average prices, especially in the Midwest and South. Their decision to pivot towards build-to-rent communities suggests a strategic shift rather than a retreat from residential investments.
Rick Sharga, a real estate expert, noted this trend’s implications for the market:
“They’re not exiting the space, just diverting capital into build-to-rent communities. But this shift means less competition for small investors and traditional homebuyers while also adding more rental supply, which is needed in today’s market where younger adults often opt to rent since they can’t afford to buy a home.”
In the meantime, investors still own nearly 20% of the 86 million single-family homes nationwide. Little wonder small investors are still all-in on the residential market. This optimism shows that there’s a lot of hope out there, even if recent home buying activity has slowed considerably.
The effects of this radical increase in investor activity on home prices and availability can hardly be overstated. One-third of all residential properties bought by investors in the second quarter of 2025 were single-family homes. Given these factors, their influence on the housing market is undeniable. As the sector matures, small and institutional investors encounter different challenges. In doing so, they have arguably cut the seeds for the tremendous upheaval now hurling American housing once again.