Investors sell off homes amid softening market
Last year saw a record-high share of investor home sales. Meanwhile, smaller investors made new gains, and the Midwest emerged as a focal point for buyers.
Key points:
- Investor home purchases accounted for 13% of all home sales in 2024, according to a Realtor.com report.
- Meanwhile, investor selling hit a record high last year, resulting in “the smallest net investor buying activity in five years,” according to Realtor.com Chief Economist Danielle Hale.
- While market activity by large investors scaled back sharply, small and medium-sized investors gained momentum.
Investor activity in the U.S. housing market increased modestly in 2024, according to a June 10 report from Realtor.com.
The report, which offers a comprehensive breakdown of investor activity across the country, indicates investors are playing a larger role in a cooling market as small-scale operators rise in influence.
"Nationwide, investors picked up more homes on net in 2024, as smaller investors were a growing majority of investor buyers," Realtor.com Chief Economist Danielle Hale said in a press release. But a record high in investor selling resulted in "the smallest net investor buying activity in five years, lessening one of the notable headwinds for entry-level buyers who often compete with investors."
While the pendulum has swung back toward buyers in the midst of a flood of inventory and a new record in total home listings value, investors are still seeing opportunities in more affordable areas, with Midwestern markets leading the nation in investor interest.
Investor presence ticks up despite constrained market
Investor purchases accounted for 13% of all home sales in 2024, up slightly from 12.7% the year before despite an overall 2.1% decline in national home sales, the report noted.
While the number of homes bought by investors only grew modestly — from 608,000 in 2023 to 610,000 in 2024 — investor market share increased because fewer buyers were active overall. The increased share of purchases was largely driven by small investors, however, who represented 59.2% of all investor purchases. Large investors, on the other hand, scaled back sharply in a trend dating back to 2022, buying just 132,500 homes in 2024 — a year-over-year decline of nearly 9%.
At the same time, investor sellers accounted for a record 10.8% of all transactions last year, the highest share in the dataset's history, researchers found. This shift suggests that while investors remain active, many are reevaluating their positions amid softening home price growth, easing rents and higher inventory. Notably, investor home sales rose 5.2% year-over-year in 2024, outpacing the 0.4% increase in investor purchases.
Smaller investors — and affordability — rule the day
Last year's market underscored the growing influence of small investors who now dominate the investor landscape, according to Realtor.com researchers. These buyers are less likely to purchase with cash than in previous years, driving a significant change in how investor activity is financed.
The share of all-cash investor purchases dropped last year to 62.3% — the lowest share since 2008 — even as cash purchases among traditional buyers increased in the last decade. This indicates that while investors are still more likely to use cash than owner-occupants, competitive pressure to win bids with cash is easing.
Meanwhile, affordability continues to drive investor decisions. The typical home purchase price for an investor in 2024 was $282,000 — over $70,000 below the national median. Investors overwhelmingly favor low-cost metros where rental yields remain strong and vacancy rates are manageable, and are flocking to cities and states where they can stretch their dollars further.
The appeal of flyover country
The Midwest emerged as a focal point for investor activity in 2024, according to the report. Midwestern markets have been consistently hot for buyers — and agents — over the past year amid strong demand and relatively reasonable affordability.
Missouri led the nation with investors accounting for 21.2% of all home purchases in the state, followed by Oklahoma (18.7%) and Kansas (18.4%). These states combine relative affordability with stable rental demand and improving inventory, making them attractive for both small and mid-sized investors.
The trend was even more pronounced at the metro level. Memphis (23.6%), Oklahoma City (21.9%) and St. Louis (21.7%) posted the highest investor buyer shares among major metros, with Kansas City and Birmingham close behind. In these cities, researchers suggested investors purchased homes for less than $150,000, positioning themselves for strong cash flow and rental yields.
Meanwhile, cities like Columbus and Cincinnati — home to major universities and job centers — ranked among the fastest-growing markets for investor activity, a trend researchers attributed in part to low prices and strong rental demand.