Investors are scooping up homes before buyers even have a chance as housing affordability worsens
Affordability challenges are continuing to weigh against homebuying activity across the US, with home prices remaining stubbornly high and mortgage rates showing little sign of a protracted slide so far this year.
While that means plenty of would-be buyers are sitting on the sidelines as they wait out the current volatility, one potential client type for mortgage brokers is remaining a potent force in the market: real estate investors, who are continuing to snap up properties and expand their market share.
The figures tell their own tale. Between 2020 and 2023, investors accounted for 18.5% of all home purchases, according to real estate data provider BatchData. But by 2025, that had jumped to well over 26%, spurred by strong activity at the beginning of the year.
BatchData said investors are a resilient presence in the market because they typically have cash and financing advantages, unlike other client types whose budgets have been squeezed by higher housing costs.
What's more, despite a turbulent political environment across the US in the first half of the year, foreign investors in the real estate market are remaining largely undeterred, Waltz chief executive officer and founder Yuval Golan told Mortgage Professional America in June.
That's because US real estate, alongside gold, is a "hard asset" that's proven especially robust even amid wider economic volatility, he said.
About 80% of foreign investors in US real estate, he said, are "sophisticated" buyers who don't live in the country. "These are lawyers, entrepreneurs and financiers who, if they were Americans or US-based, would have an 800 or 850 credit score," he explained.
Investor purchases could be helping paper over the cracks of a sluggish housing market, which has seen activity drop off since 2022 amid rising interest rates and prohibitive mortgage costs.
New home sales in May dropped 13.7% to an annualized rate of 623,000 units, the largest monthly decline since May 2022 and a seven-month low, according to Commerce Department data.
The median price of a new home also rose 3% year-over-year to $426,600, marking the first annual price gain of 2025, despite builder incentives meant to lure hesitant buyers.
At the same time, more deals are falling apart. Around 6% of pending home sales were canceled in May, according to the National Association of Realtors. That’s the third consecutive month with a year-over-year increase in broken contracts.
Read more: US housing market sees surge in broken deals
With home sales dragging and listings staying on the market longer, inventory is building—creating opportunity for investors who aren’t dependent on today’s mortgage rates. Many are paying in cash or using home equity to finance new purchases, while first-time and mid-income buyers wait for rates or prices to drop.
BatchData defines investor purchases as homes not bought as a primary residence, this includes vacation properties and rentals. In 2024, investors bought 1.2 million homes, up from the annual average of 1.1 million since 2020.
Investor-owned homes now make up about 20% of the country’s 86 million single-family houses. But despite headlines about institutional investors dominating the market, most of those properties are actually held by smaller-scale landlords.
About 85% of investor-owned homes are held by those with 1 to 5 properties. Another 5% are owned by investors with 6 to 10 homes, and only 2.2% of investor-owned properties are in the hands of institutional investors who own 1,000 or more houses.
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