If you’re in the market to buy a home, you might feel like you’re constantly competing against deep-pocketed investors scooping up every available property. Many people believe that Wall Street firms and institutional investors are making it nearly impossible for regular buyers to succeed.
But here’s the reality: investor activity is actually on the decline. The big players aren’t nearly as active as you might think. Let’s break down the facts and separate myth from reality.
Most Investors Are Individuals, Not Large Corporations
There’s a common belief that massive real estate firms are dominating the market, but that’s simply not the case. According to The Mortgage Reports:
“On average, small investors account for around 18% of the market, while mega investors represent only about 1%.”
Most investors are everyday individuals—your neighbors, local business owners, or families investing in a rental or vacation home. These aren’t giant corporations buying entire communities, but rather small-scale investors with just a few properties.
Investor Home Purchases Are Declining
You may still hear about large investors making headlines, but their activity has significantly decreased. Institutional investors—those who own at least 1,000 single-family homes—peaked in Q2 2022, making up only 2.4% of home sales. According to John Burns Research and Consulting, by Q3 2024, that number had dropped to just 0.3%.
That’s a dramatic shift, meaning there are far fewer investors competing for homes today compared to just a few years ago.
Why Are Investors Pulling Back?
The slowdown in investor purchases isn’t random. Higher mortgage rates and rising home prices have made it less appealing for investors to buy right now. This is great news for buyers—it means you may have less competition than you previously thought.
What This Means for You
The idea that institutional investors are snatching up all the homes is more myth than fact. While some investors are still active, they are far less aggressive than they were in previous years.
Bottom Line
If you’ve been holding off on buying a home because you thought investors had the upper hand, now is the time to reconsider. The landscape is changing, and there could be more opportunities than you realize.
Let’s connect and talk about the local market—your dream home might be within reach!