Investor home purchases are on the decline across the country due to slow homebuying demand, a lackluster rental market, economic uncertainty and elevated interest rates, according to Redfin.

The market share for investors is also falling. In the fourth quarter of 2024, 17% of homes were acquired by investors, down from 19% a year ago. Real estate investors purchased 47,004 homes in the fourth quarter of 2024, down 3.9% year over year. The quarterly purchases were at the lowest level for that time of year since 2016.

Investors purchased 32,622 homes in the fourth quarter, down 1.6% from the previous year and the lowest number of purchases for that time of year since 2016. Investors also snapped up 8,220 condominiums, down 13% from the previous year and the lowest amount for a fourth quarter since 2012.

Redfin, which analyzed home purchases across 39 of the most populous U.S. metropolitan areas, found that investors were buying a lower percentage of expensive and medium-priced homes during the quarter than in the past.

The reasons for the investor pullback are the same as with most homebuyers: high mortgage rates and high prices. Investors were also wary of buying real estate to fix and flip because it is more difficult to earn a profit. In addition, rents have plateaued, and even dropped in some markets, due in part to a major increase in apartment construction in recent years.

Three of the five metro areas where investor purchases dropped the most in the fourth quarter were in Florida. They include Orlando, where investor purchases were down 27.5%; Chicago, which experienced a 23.3% drop in investor activity; Miami, where purchases decreased 21.3%; Atlanta, which saw an 18.4% decline; and West Palm Beach, where purchases were down 14.5%.

The cities seeing the most investor interest in the fourth quarter were topped by Seattle, where purchases were up 33.8%; followed by San Jose, where investor purchases grew by 21.2%; next was Oakland, up 19.4%; San Francisco, up 14.1% and Detroit, up 15.5%.