The trend of investors buying single-family homes has become more prominent since the onset of the COVID-19 pandemic and has also garnered a lot of debate. The share of investor purchases of single-family homes averaged about 17% in 2019, according to a recent CoreLogic report. The share jumped during the pandemic and has averaged 28% since. While the share remains elevated, the number of single-family purchases by investors did slow from the pandemic peaks as overall home sales have slowed in 2023 and 2024. Still, investors currently purchase about 90,000 homes per month on average, down from about 120,000 homes purchased during the 2022 peak.
While the idea of investor purchases gets tied to large, institutional investors, most are small- and medium-sized investors. Mega-investors are those that own 1,000 or more properties; large investors are those that own of 100 to 999 properties; medium investor are those that own 10 to 99 properties and small investors are defined as those that own three to nine properties.
Over the last year, 42% of investor purchases were by small investors and an additional 37% were from median investors — 10% were by large and 11% by mega (or institutional) investors. The share of small investors did decline some since the onset of the pandemic when mega investors stepped in. Prior to the pandemic, mega investors averaged about 7% of overall investor purchases and their share increased to 14% during the pandemic — it has now slowed. To put it in numbers, over the last two years, about 37,000 monthly home purchases were made by small investors and an additional 33,000 were by medium investors. The remaining 20,000 were evenly split between large and mega investors.
It’s important to note that while the share of investor purchases remains elevated, investors have been increasingly buying from each other. In 2021, 16% of purchases were from another investor and that share rose to 20% in early 2024. That becomes an important variable when thinking about the impact of investors in the homeownership market, which may be more notable in locations with higher rates of investments.
Investor activity tends to be clustered in the Western markets, as well as Texas and the South. Among the top 10 markets for overall investor activity in 2024, five are in California, including San Jose, Los Angeles, San Diego, San Francisco and Riverside; three are in Texas — Brownsville, El Paso, McAllen, with the last two including Atlanta and Albuquerque, New Mexico. While not in the top 10, other cities that have seen significant increases in investor purchases, particularly from small investors, include Fresno, Seattle, Visalia, Stockton, Bakersfield and Modesto.
Investor activity in California is somewhat of a puzzle given the high levels of home prices, but the significant shortage of housing that plagues the state is the primary driver behind home price surges and the driver behind smaller investor interests.
For mega investors, demand drivers are different as their share tends to be higher in markets in the Southeast, Mountain and Desert West regions, where they have been adding properties since the end of the 2009 housing crash and where home price levels are relatively low. With 4% of single-family sales over the last year, Atlanta ranks as having the highest share of mega investors — but that share has fallen from 8% pre-pandemic.
Following Atlanta, four other top 10 markets for mega activity are in North Carolina, including Raleigh, Durham, Charlotte and Greensboro. The others include Tucson, Arizona; Jacksonville, Florida; Boise, Idaho; Memphis and Nashville. Similarly to Atlanta, Charlotte, Boise and Nashville have seen slowing activity among mega investors compared to 2019. In contrast, Tucson and Durham have recently seen an increase.
While shares of investor activity may be elevated, the total purchases depended on the number of total sales. With that in mind, Dallas, Houston and Atlanta stand out with almost 10,000 homes being purchased by investors of various sizes. That is significantly higher than in any other market.
