A new Realtor.com report shows that U.S. investors are buying homes, though activity has slowed from last year’s pace. Investor home sales, meanwhile, declined after 2024’s surge in transactions—part of a broader cooling across the housing investment sector.
Small investors made up the bulk of purchases, accounting for their largest share since 2007 at 62.5 percent of all investor buyers. In the second quarter alone, small investors bought about 70,000 homes, far outpacing the 19,800 purchased by large ones. Realtor notes that “small investor” refers to buyers using corporate entities and does not include individual owners unless they purchase under a business structure.
Deals involving large investors fell to just 20.1 percent of investor activity, underscoring the market’s shift toward smaller players.
The number of homes purchased by investors rose by 0.1% to 10.8% in 1H 2025, even though they bought 5,000 fewer properties than in 1H 2024. In 2Q 2025 alone, investors bought 136,000 homes – down 2.7% year-over-year. However, while investor purchases fell by 1.8% in the first half, overall home sales fell by even more to 3.8%, resulting in a higher investor-buyer share year over year.
Of all home sales in the period, 9.2% were by investors, unchanged from the prior year. Sellers were less active than buyers.
The report also described the dynamic that has emerged between investors and homebuyers. In recent months, high mortgage rates and more stable home prices have deterred some homebuyers, giving investors the market advantage. Reflecting an ongoing trend, more investors bought than sold homes, purchasing 41,000 more homes than they sold – effectively limiting the number of homes for especially affordable properties available for ordinary buyers.
“In Q2 of 2025, the typical investor purchased a home for $287,000, more than $80,000 below the national median sale price ($372,000 in Q2). This trend highlights how investors tend to concentrate in lower-priced metros and in the lower-priced segments of the market, where homes are more likely to generate positive rental returns,” the report noted.
Among the top 50 U.S. metros, Memphis, St. Louis and Oklahoma City had the highest investor buyer share.
It added that the South and the Midwest, which have the highest rental vacancy, are especially attractive to investors looking for lower-priced homes, tight rental markets, and stable rental returns. Such investors are often looking for steady income and long-term appreciation. States like Missouri, Mississippi, Nevada, Indiana and Alabama are particularly targeted.
However, there is another segment of investors who adopt a speculative or appreciation-oriented strategy. They are more likely to search out markets with tight supply, strong price growth or short-term rental potential, often in high-demand or lifestyle-focused regions with intense competition and affordability pressures. Such investors look for states with low entry costs and solid rent-to-price ratios, including Michigan, Maryland, Virginia, Delaware and Wisconsin.
Some investors, however, aim for states where investors pay the most over the median sale price.
“These investors aren’t bargain hunters; they’re buying access to constrained, high-demand markets,” the report commented. States in this category include Montana, Utah, California, New York and Vermont. In Montana, for example, investors’ median purchase is $574,000, while the median purchase is $425,000 – a 35.1% price differential.
By metro, such investors pay the largest premium for homes in Los Angeles (19.8% above the median – possibly due to the wildfires that consumed parts of the city), San Diego (9.2% above), New York City (8.7% above), San Francisco (6.8% above) and Nashville (3.4% above).
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