The share of home purchases made by investors continues to outpace pre-pandemic levels, though purchase volumes remain below the 100,000-monthly sales threshold averaged by investors in 2021 and 2022.

Investor share declined from a six-year peak of 32% of single-family home purchases in January 2025 to 29% by the end of June, according to a recent report by Cotality, a real estate technology and market analytics firm. Investor purchase share oscillated between 15% and 20% prior to 2020.

Rental demand supported by sidelined owner-occupied buyers has helped sustain their purchase share amid difficult market conditions through the first half of 2025. In the second quarter of this year, nearly 3 in 10 home sales went to non-owner-occupied buyers.

“There are owner-occupied buyers not buying. They’re renting,” explains Thom Malone, principal economist at Cotality and author of the report. “That drives rental demand up and gives more market power to investors. They have more leeway to raise rents on the back end, shielding them from affordability issues that way as well.”

Exhibiting resilience in today’s high-price, high-rate environment, investors purchased an average of 85,000 homes per month through the first half of 2025, mirroring the 84,000 monthly average from the first half of 2024.

Borrowing costs projected to stay elevated through the end of 2025 will likely maintain purchasing pressure on owner-occupied buyers. The Mortgage Bankers Association forecasts 30-year mortgage rates will remain between 6.5% and 7% through the end of the year and Fannie Mae projects mortgages rates above 6% through the end of 2026.

Outsized growth from medium-sized investors

Cotality defines home investors as buyers owning three or more properties, with small investors being those owning fewer than 10 properties, medium investors owning 10 to 99 properties, large investors owning 100 to 999 properties and mega investors owning more than 1,000 properties.

While small investors remain the most common investor type, with 14% market share in June, medium-sized investors have spurred the recent increase in investor activity, managing to grow their market share to 10% in June 2025 from 6% in June 2024. Large investors accounted for 3% of purchases, and mega investors just 2%.

Medium-sized investors have grown market share in the past six months by nature of their position in the market, acting a little like the cash-rich large investors, and a bit like the less diversified small investors, too.

“They’re more likely to be using cash, but they’re also more likely to probably just have real estate,” Malone explains. “Rental demand has been raised, but it doesn’t look relatively as good for the big investors, and small investors have some of the same affordability troubles that owner-occupied buyers do.”

U.S. home prices failing to keep pace with broader inflation for the 12 months ending in June has eroded American housing wealth in real terms for the first time in years, which could impact home investors’ strategies. Affordability barriers supporting rental demand, persistent under-construction in the U.S. and aging housing stock can shield home investors from adverse impacts, though.

“Of course they need an exit strategy,” says Victor Kuznetsov, founder and managing partner of Imperial Fund Asset Management, the securitization partner of non-QM lender AD Mortgage, “but demand for housing isn’t being met and investors are filling that gap.”

Estimates vary, but the median age of U.S. housing stock is roughly 40 years old. In much the same way that an aging U.S. population increases demand for ophthalmologists to perform cataract surgery, aging housing stock increases demand for fix-and-flip investors and liquidity partners financing residential transition loans (RTLs).

“RTLs have been very, very popular over the past 12 months,” Kuznetsov says. He notes that demand for whole loans, especially debt-service coverage ratio (DSCR) loans commonly used to buy single-family rental properties, is also not being met, given declining transaction volumes for owner-occupied homes.

“Insurers and aggregators have been very, very aggressive bidding on DSCR pools because of the slower pre-payment speeds,” he continues, leading to wider profit margins for mortgage lenders who originate them. “Whole loans are a very good product for life insurance companies to have on their balance sheet, and DSCR loans because of the prepayment speeds and good capital treatment,” he says.

Through the first six months of 2025, the metropolitan statistical areas boasting the largest volumes of investor purchases were Dallas (21,842), Houston (18,324), Atlanta (15,536), Phoenix (12,640) and Los Angeles (11,130), according to Cotality.

Metro areas boasting the largest overall investor purchase share through the first six months of 2025 were Los Angeles (44.2%); El Paso, Texas (42.8%); Atlanta (39.8%), Memphis, Tenn. (37.6%); and San Diego (37.2%).