Are Investors Actually Buying Up All the Homes?

Are Investors Actually Buying Up All the Homes?

Are you looking to buy a home but feel like large Wall Street investors are taking over the market? Many assume big investors are driving up prices and buying all available homes, making it difficult for regular buyers to compete.

However, the reality is different. Investor purchases are actually decreasing, and major players are not as active as many believe. Let’s look at the facts and clear up this misconception.

Most Investors Are Small, Not Large Institutions

Many people think institutional investors dominate the market, but that’s not true. The Mortgage Reports states:

“On average, small investors account for around 18% of the market, while mega investors represent only about 1%.”

Most real estate investors are small-scale owners with only a few properties, not large corporations buying up entire neighborhoods. These investors are often individuals who rent out a second home or own a vacation property.  

Investor Home Purchases Are Declining  

What about the large investors often mentioned in the news? Recently, institutional investors—those making headlines—have significantly reduced their home purchases.  

According to John Burns Research and Consulting (JBREC), at their peak in Q2 2022, institutional investors (owning 1,000+ single-family homes) accounted for only 2.4% of home sales. Since then, that number has declined, reaching just 0.3% by Q3 2024. (see graph below):

This is a significant change, meaning fewer investors are competing in the market than in previous years.

Investors are now more hesitant to buy, primarily due to higher mortgage rates and home prices making purchases less appealing.

The belief that Wall Street investors are taking over the housing market and making it impossible for buyers to compete is a misconception. While some investors remain active, their presence has significantly decreased compared to past years.

Bottom Line

Large institutional investors are not dominating the market—if anything, they are purchasing fewer homes. Let’s connect to discuss current market conditions in our area. There may be more opportunities available than expected.