A new report from Redfin revealed that investor purchases of residential properties were up 3.4% annually in the second quarter, marking the largest year-over-year leap in investor buys in two years.

Investors purchased one out of every six homes (roughly 16.8%) sold from April through June. That’s up from 16% in the same period last year and the second highest second-quarter share on record, trailing only 2022. Market share for investors has crept upwards because they’ve been far more active than regular homebuyers in leaving the sidelines, in large part because most of them (almost 70%) pay in cash and are less sensitive to interest rates.

Investors spent approximately $43 billion on properties nationwide in the second quarter. That dollar value is up 13.7% from the second quarter of 2023, also the largest annual jump in two years.

It’s the latest rebound in what’s become a yo-yo cycle for residential real estate investors, whose activity plummeted almost 50% last year. Before that, investor activity more than doubled during the pandemic buying boom.

“One reason real estate investors are coming out of hibernation is to take advantage of robust demand from renters,” said Sheharyar Bokhari, senior economist at Redfin. “Elevated home prices and mortgage rates have pushed homeownership out of reach for a lot of Americans, which is fueling demand for rentals. Investors, many of whom can afford to pay in cash to avoid the sting of high mortgage rates, are cashing in on that demand.”

Returns on homes sold by investors are still trending higher than pre-pandemic levels, although profit margins are down year over year (58% in Q2 2024 compared to 62.1% in Q2 2023). But just 5% of homes sold by investors generated a loss, down from 5.8% one year earlier — and also below pre-pandemic norms.