Sales of single-family homes to real estate investors declined sharply in the first quarter, though investors maintained an elevated share of overall activity.

Investors bought just over 236,000 homes during the first three months of 2026, a roughly 23% decline from the previous quarter and the first quarter of 2025, according to sales figures published Tuesday by BatchData, a real estate market analytics firm.

The company attributed the pullback to persistent affordability challenges that drove a broader first-quarter homebuying slump. Purchase mortgage loan counts fell to 2014 levels at the start of the year, according to real estate analytics firm Attom.

Meanwhile, data from the National Association of Realtors indicates that first-quarter existing-home sales totaled 741,000 — a more than 18% drop from about 908,000 sales during the fourth quarter.

On par with 2025 levels, real estate investors accounted for nearly 32% of all first-quarter home sales transactions, which BatchData described in Tuesday’s report as reflecting “the absence of traditional buyers, not a surge in investor demand.”

“The apparent paradox resolves cleanly once the macro backdrop is understood — traditional homebuyers, squeezed by affordability and rate pressures, are simply transacting far less, leaving investors a larger slice of a shrinking pie,” said BatchData.

The nine-quarter low in investor purchases reflects volatile market conditions to start 2026, against a backdrop of investors reporting a “mixed outlook” for new acquisitions and growing demand for hybrid exit strategies amid slow turnover and rising rental vacancies.

Volatile market conditions

Macroeconomic uncertainty spiked in early January as President Donald Trump aggressively courted annexation of Greenland — a staunch U.S. ally and party to NATO’s collective-defense pact.

Despite rising geopolitical tensions, secondary market mortgage spreads narrowed in January and February as Fannie Mae and Freddie Mac began executing Trump’s directive for the government-sponsored enterprises to purchase up to $200 billion in mortgage bonds.

But on the investor front, single-family investors were reeling from the Trump administration’s proposed cap on single-family holdings by “large institutional investors,” to include the forced sale of built-to-rent properties by firms in that investment sector.

Watered down since first proposed in January following an industry revolt, the White House proposal upended a bipartisan housing reform package that remains in limbo with lawmakers on Capitol Hill.

If policy pressures largely dominated sector outlooks at the start of the first quarter, spiking volatility in financial markets brought the quarter to its close.

As yields on 10-year U.S. Treasury bonds eased from 4.3% on Jan. 20 to a first-quarter low of 3.96% on Feb. 27, mortgage rates on typical 30-year home loans fell below 6% for the first time since late 2022. Declining rates spurred a refinance wave but failed to generate a commensurate surge in buying activity.

Small investors outperform

On Feb. 28, the U.S. and Israel launched airstrikes on Iran, pushing mortgage rates to around 6.5% by the end of March as the Strait of Hormuz closure sparked a global energy and trade shock causing inflation to skyrocket and shattering investor outlooks.

Real estate investors owned about 18% of all single-family homes in the U.S. as of the end of March, according to BatchData’s figures, with about 96% of investor-owned homes controlled by “small investors” with one to 10 properties in their portfolios.

Institutional investors, which BatchData defines as owning 1,000 homes or more, accounted for just 2.18% of investor-owned stock, and have been net sellers of properties for nine consecutive quarters, the company said.

The opposite is true for smaller investors, who purchased 3.4 times more properties than they sold in the quarter, by a margin of 236,053 to 69,960. The steady accumulation of single-family homes by smaller investors supports ongoing growth in a core rental market.

“The American rental market is, overwhelmingly, the product of small entrepreneurs — individuals and families who own a handful of properties,” said BatchData, citing that individuals and corporate entities that own five or fewer properties account for about 92% of investor-owned stock.

“Policy aimed at ‘investors’ as a monolith risks targeting the small owners who supply most rental housing while leaving the structural picture unchanged,” the company said.