C
ompetition for homes persists, particularly at lower price points where first-time buyers face off against investors. Elevated mortgage rates and home prices appear to be dampening investor enthusiasm for residential real estate. According to a recent report from CoreLogic, while investor activity increased between Q2 and Q3, their market share remains below last year's level – 25% compared to 28%. The firm predicts that this trend will continue unless mortgage rates drop.

    Investors' reduced interest is attributed to the current economic climate: high housing prices, elevated interest rates, and a decline in total purchases. As Thomas Malone, author of the report, notes, "It's unclear what may draw investors back into the market at previous levels." Historically, investors flocked to the market when mortgage rates were low; their share peaked at nearly 30% in January 2024.

    The presence of smaller-scale investors, often referred to as "mom-and-pop" groups with between 3 and 10 units, is particularly significant. These investors make up 60% of investor purchases and play a crucial role in buoying home prices despite softer overall demand. In contrast, large and mega-investors (those with 100-1,000 properties or more than 1,000 properties) account for a relatively small share of the market – less than 5% in major metro areas.