Investors Accounted for 30% of All Home Purchases in 2025
Min 1: Institutional Investors Net Sellers for Sixth Consecutive Quarter
The big players are pulling back. Major companies like Invitation Homes, Progress Residential, American Homes 4 Rent, and FirstKey Homes were all net sellers in third quarter 2025 according to Parcl Labs analysis. This marks the sixth consecutive quarter where mega-investors sold more properties than they bought—selling 5,801 homes while purchasing just 4,069 during second quarter. CJ Patrick CEO Rick Sharga explains they're not exiting the space, just diverting capital into build-to-rent communities. The shift means less competition for small investors and traditional homebuyers while adding more rental supply needed in today's market where younger adults often opt to rent since they can't afford to buy. Institutional investors average purchase prices of just $279,889—well below their average sales prices of $334,787—showing they're unloading older inventory while focusing new capital on purpose-built rentals.
Min 2: Small Investors Buy Around $250,000 Homes
Small investors typically buy homes around $250,000, invest up to $15,000 in renovations, and charge $2,000 to $2,200 in monthly rent according to market tracking. They pay in cash 62.3% of the time and close deals quickly—sometimes in weeks rather than months. Rajan Bhatt at Strand Capital says his firm bought about 100 homes in markets like Chattanooga and Indianapolis, expecting 5% annual home appreciation with plans to sell at profit in three years. Average investor purchase price across all sizes hit $455,481 in second quarter—well below the $512,800 average market price and $410,800 median—indicating continuing focus on value-oriented segments like smaller homes in less expensive markets. An investor who buys $240,000 homes in Indianapolis at 8% cash-on-cash yields while enjoying 5% annual appreciation generates $19,200 annual cash flow plus $12,000 appreciation per home—$31,200 total annual return on $240,000 investment delivering 13% total returns.
Min 3: Investor Purchases Driven by Owner-Occupant Retreat
The rise in investor share comes more from fewer owner-occupants entering the market than from spike in investor buying. Investors purchased roughly 85,000 homes per month this year, nearly unchanged from the 84,000-unit monthly average in first half of 2024 according to Cotality. Investor purchases remained relatively stable—growing only 9% from 1.1 million annually to 1.2 million in 2024—while overall home sales collapsed 30% from their 2021 peak of 6.9 million to just 4.8 million in 2023. First-time buyers continue struggling with mortgage rates hovering near multi-decade highs and prices remaining close to record levels. Medium-sized investors holding between 10 and 99 properties drove recent increases, growing market share from 6% in June 2024 to 10% in June 2025 as they leverage hybrid advantages of scale efficiencies without institutional overhead costs.
Min 4: Geographic Concentration Follows Clear Fundamentals
Texas has highest number of investor-owned homes at 1.46 million followed by California with 1.33 million and Florida with 1.1 million according to BatchData analysis. These align with population—California most populous at nearly 40 million residents, Texas second at over 31 million, Florida next with more than 23 million. But states with highest percentage of single-family homes owned by investors are tourist hotspots Hawaii at 26% and Alaska at 27%, plus Montana at 31% and Maine at 31%. Other states with higher-than-average investor ownership include highly affordable and landlord-friendly Arkansas, Mississippi, and West Virginia plus states benefitting from recent population migration like Idaho, Vermont and Wyoming. In 18 of top 20 metros, small investors consistently make up around 15% of market with variations in total share primarily driven by medium, large, and mega investors.
Min 5: Investor Activity Expected to Stay Between 25% to 30%
Investor share follows seasonal pattern, rising in winter and declining in summer as owner-occupied buyers re-enter market. Absent major changes in interest rates or macroeconomic conditions, investor share expected to fluctuate between 25% and 30% in foreseeable future according to Cotality forecast. Cotality Principal Economist Thom Malone says investors expanded their market presence significantly in 2025, building on historically high levels and demonstrating resilience in high-price, high-rate environment. As adverse conditions persist, investors remain well positioned to meet rental demand. The fundamentals continue favoring rental demand—as long as affordability remains strained for owner-occupants, investors will continue serving as major force in U.S. housing market filling gap left by traditional buyers priced out by combination of elevated mortgage rates and record home prices.
The Takeaway
Investors accounted for nearly 30% of all single-family home purchases in 2025, spending $483 billion through October on track to surpass 2024's $475 billion with small investors owning 1 to 5 homes controlling 85% of investor-held properties while institutional investors own just 2.2%. Mega-investors like Invitation Homes sold more than they bought for sixth consecutive quarter—offloading 5,801 homes while purchasing 4,069 in Q2—as they pivot capital to build-to-rent communities reducing competition for small investors. Small investors typically buy $250,000 homes investing $15,000 in renovations charging $2,000 to $2,200 monthly rent while paying cash 62.3% of time, with Indianapolis deals at 8% cash-on-cash plus 5% appreciation generating 13% total returns. Investor share rise driven more by owner-occupant retreat as purchases stayed flat at 85,000 monthly while overall home sales collapsed 30% from 2021 peak, with medium-sized investors growing from 6% to 10% market share. Geographic concentration follows fundamentals with Texas leading at 1.46 million investor-owned homes but tourist states like Hawaii and Alaska posting highest percentages at 26% to 27%, as investor share expected to fluctuate between 25% to 30% filling gap left by traditional buyers priced out by elevated rates and record prices.
