Investor Share of Homebuyers Reaches Five-Year Peak in Q2 2025
Real estate investors, encompassing both individual and institutional buyers, accounted for one-third of all single-family home sales in the second quarter of 2025. This represents a notable increase from 27% in the first quarter and marks the highest investor share recorded in five years, according to CJ Patrick Co., which analyzed data provided by real estate analytics firm BatchData. In 2024, investors made up 25.7% of residential home sales, underscoring a steady upward trend in their market participation despite an overall cooling in home sales volume.
Investor Sales Volume Declines Amid Weaker Market
While the investor share of home purchases increased, the absolute number of homes acquired by investors declined by approximately 16,000 compared to the same period last year. This drop is attributed to a broader slowdown in the housing market, with total home sales falling significantly year-over-year.
Ivo Draginov, co-founder and Chief Innovation Officer at BatchData, noted, “While investors purchased more homes than they sold in the second quarter, they did sell over 104,000 homes, with 45% of those sales going to traditional homebuyers. Investors continue to provide necessary liquidity in a weak market and contribute much-needed inventory for both rental and owner-occupied housing.”
Small Investors Dominate; Institutional Players Shift Strategy
Although institutional investors often dominate headlines in the single-family rental sector, small-scale investors, defined as individuals owning 10 or fewer properties, comprise over 90% of the investor-owned housing market. Conversely, large institutional investors owning 1,000 or more properties represent just 2% of investor-owned homes. Institutional investors have been net sellers for six consecutive quarters, selling more homes than they purchase. Major landlords such as Invitation Homes, Progress Residential, American Homes 4 Rent, and FirstKey Homes have all increased home sales in the third quarter of 2025 relative to acquisitions, according to Parcl Labs data.
Rick Sharga, CEO of CJ Patrick Co., explained, “Institutional investors are not exiting the market but redirecting capital toward build-to-rent communities. This shift reduces competition for small investors and traditional buyers while expanding rental supply, meeting the demand from younger adults who often rent due to affordability challenges.”
Regional Concentration of Investor-Owned Homes
Texas, California, and Florida lead in the total number of investor-owned single-family homes, reflecting their large populations. However, states such as Hawaii, Alaska, Montana, and Maine exhibit the highest proportion of investor-owned homes relative to their housing stock, influenced by strong tourism sectors.
Investor Purchase Prices and Market Focus
Investors traditionally target lower-priced properties that promise profitable resale opportunities. In Q2 2025, the average purchase price for investor-acquired homes was $455,481, below the national average home price of $512,800 but the highest average in the past six quarters amid rising home prices. Institutional investors tend to acquire even more affordable homes, with an average purchase price of $279,889 and an average sale price of $334,787. Their activity is primarily concentrated in the Midwest and Southern states, where home prices remain below the national average.
FinOracleAI — Market View
The sustained rise in the investor share of home purchases amid a cooling housing market reflects a strategic repositioning by both small and institutional investors. While small investors capitalize on less competition and affordable properties, institutional players pivot towards build-to-rent developments, addressing rental demand but reducing their direct homeownership footprint.
- Opportunities: Small investors face reduced competition from institutions, enabling expansion in affordable housing segments.
- Risks: Continued market slowdown may pressure home prices and rental yields, impacting investor returns.
- Regional focus: Growth prospects remain strong in populous states and tourism-driven markets.
- Market dynamics: Institutional shift towards build-to-rent may increase rental inventory but limit single-family home sales growth.
Impact: The evolving investor landscape supports liquidity and inventory in a sluggish market, with nuanced effects on pricing and housing availability for traditional buyers.
