Are Investors Actually Buying Up All the Homes?

Are Investors Actually Buying Up All the Homes?

If you're trying to buy a home and worried about competing with deep-pocketed Wall Street investors, here’s a reassuring truth:

Investor Activity is Declining Contrary to popular belief, big investors aren’t dominating the market. The concern that they’re driving up prices and buying up all available homes is overstated.

Investors Are Mostly Small-Scale The common image of massive institutional investors ruling the market is misleading. According to The Mortgage Reports, the majority of investors are actually small-scale, typically individuals or small groups who own a few properties.

This information can ease concerns for regular buyers, showing that the market might be more accessible than it seems.

“On average, small investors account for around 18% of the market, while mega investors represent only about 1%.”

Most real estate investors are small-scale, often referred to as "mom-and-pop" investors, who might own a rental property or a vacation home. They're individuals like your neighbors, not large corporations.

Investor Home Purchases Are Declining

Despite the prominence of big investors in the media, institutional investors have significantly reduced their activity in the housing market. According to John Burns Research and Consulting (JBREC), institutional investors (those owning 1,000+ single-family homes) accounted for only 2.4% of home sales at their peak in Q2 2022. By Q3 2024, this figure had dropped to just 0.3%, indicating a major pullback in their market presence.

The market has seen a significant decrease in investor activity recently, which means fewer investors are competing for homes than in the past.

Why Are Investors Pulling Back? The current reluctance among investors to buy is largely due to higher mortgage rates and rising home prices, which make investments less appealing.

Debunking the Myth The perception that Wall Street investors are monopolizing the housing market is largely a myth. While some investors remain active, their presence has decreased compared to previous years.

Bottom Line Big institutional investors are not dominating the home-buying scene; in fact, they're participating less than before. Let's discuss what this means for our local market. There may be more opportunities for you to buy a home than you realize.

Does this shift in investor activity change your perspective on your chances in today’s housing market?