Investor Activity Is Cooling — But Not Collapsing

In 2024, investors accounted for 13% of home purchases and 10.8% of sales, snapping up roughly 610,000 homes—a marginal increase from 2023. But here’s what really matters: they sold 509,000 properties, resulting in a net gain of just 101,000 homes.

That gap—between purchases and sales—is the smallest since 2020 and represents less than half of the net gain seen during the pandemic peak of 2022, when investors acquired 260,000 more homes than they sold.

Translation: Even seasoned investors are slowing down, pausing aggressive expansion in the face of high interest rates, inflated property values, and economic uncertainty.

“The market saw the smallest net investor buying activity in five years,” says Danielle Hale, chief economist at Realtor.com. For active investors, this suggests a turning point where caution and capital preservation are replacing rapid acquisition.

Investors Are Flocking to Affordable Markets

With price pressure still high in many metros, smart money is moving to more affordable regions—especially where rents are strong and entry prices are low.

In fact, 9 of the top 10 investor markets had median purchase prices below $300,000. Five were even below $200,000—an appealing prospect when the national median home price is hovering around $440,000.

Top investor states by share of purchases:

• Missouri: 21.2%

• Oklahoma: 18.7%

• Kansas: 18.4%

• Utah: 18.0%

• Georgia: 17.3%

• Montana: 17.2%

• Mississippi: 16.7%

• Wyoming: 16.3%

• Indiana: 16.1%

• Alabama: 15.9%

“These markets offer the sweet spot: low acquisition cost, stable or rising rents, and relatively affordable living costs,” explains Realtor.com economist Hannah Jones. For BRRRR investors, Section 8 landlords, and midterm rental operators, these markets present ripe opportunities.

Notably, Kansas City saw the highest rent growth in April 2025—even as prices remain modest relative to incomes. That’s the kind of arbitrage every investor wants.

Why Are So Many Investors Selling?

While some are buying, many more are liquidating. Investor sales hit a record 10.8% of all home sales last year—up from 10.1% in 2023.

Top states for investor sales:

• Oklahoma: 16.7%

• Missouri: 16.7%

• Georgia: 15.9%

• Nevada: 14.3%

• Utah: 14.3%

There’s a clear overlap between where investors are buying and where they’re selling. This suggests strategic repositioning: shifting portfolios toward cash-flow-positive properties and offloading assets that no longer meet performance goals.

For flippers, this trend could also signal heavier competition in resale markets, especially in places where investor listings are piling up.

Small Investors Are Dominating the Landscape

Here’s a bright spot: In 2024, smaller investors—those with fewer than 10 properties—accounted for 59.2% of investor purchases, the highest share on record. Meanwhile, large institutional buyers shrank to just 21.7%, their lowest level since 2007.

This is a massive shift, giving independent investors more leverage and less direct competition from Wall Street-backed firms.

What This Means for Real Estate Investors Now

• Timing Matters: The days of blindly scaling are over. Strategic acquisition, rental yield analysis, and clear exit plans are critical.

• Affordability Wins: If you’re not targeting sub-$300K markets with rising rents, you may be missing key opportunities.

• Buy and Hold vs Flip and Hope: Long-term cash flow appears more attractive than speculative appreciation, especially as borrowing costs remain high.

• Small Investors Have a Window: With institutional players stepping back, now’s the time to expand—before the next wave of big money re-enters.