How Many Homes Are Investors Actually Buying?

Andrea Ballesteros May 30, 2024

If you’re trying to find a house to buy, you might be wondering if big investors are snapping up all the properties. Maybe you’ve read about it or seen social media reels claiming that investors are making it tougher for the average buyer to find their dream home. Spoiler alert – there's a lot of misinformation out there. Let’s clear things up and reveal what's really happening. A lot of the big investor activity is actually in the rearview mirror.

The Wall Street Journal (WSJ) sheds light on the situation:

“Investors of all sizes spent billions of dollars buying homes during the pandemic. At the 2022 peak, they bought more than one in every four single-family homes sold, though more recently their activity has slowed as interest rates rose and supply became tighter.”

The key takeaway here is that investor activity has significantly slowed. Even during the peak of investor buying, three out of every four single-family homes were purchased by regular, everyday buyers – not investors. Most of the investors who bought homes in the past few years weren’t the big investors you might be hearing about. The vast majority were small mom-and-pop investors – people like your neighbors who own only a couple of homes, perhaps just their main residence and a vacation home.

But let’s zero in on the giant, mega-investor firms since they’re often the focus of social media chatter. Mega investors are those who own 1,000+ properties. Surprisingly, according to the Wall Street Journal, they don’t buy as many homes as you might think. During the peak in 2022, institutional investors bought about 2% of available single-family homes. Now, that percentage has shrunk even further (so small the number rounds down to 0%).

To understand why this percentage is trending down, private lender RCN Capital asked investors about the challenges they’re facing. Here’s what Jeffrey Tesch, CEO of RCN Capital, discovered:

“Investors are already facing many challenges in today’s housing market – rising prices, limited inventory, and higher financing costs.”

These challenges are crucial to understand because they show that big, mega investors aren’t taking over the housing market. So, don’t believe everything you hear. They aren’t hoarding all the homes and making it impossible for regular people to buy.

Bottom Line

Big investors aren’t buying up all the homes. If you've got questions about what you’re hearing about the housing market, let's chat. I can help you understand what’s really going on and guide you through the process of finding your perfect home.

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