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new study highlights growing concerns over the US housing market, with real estate investors increasingly dominating home sales. In the first three months of this year, nearly 27% of homes sold were purchased by investors, the highest share in at least five years, according to data from BatchData. This is up from an average of 18.5% between 2020 and 2023.
Investors bought over 265,000 homes in the January-March quarter, a modest 1.2% increase from the same period last year. However, this rise reflects the slowing housing market, as traditional buyers face affordability constraints due to rising mortgage rates and home prices.
The US housing market has been sluggish since early 2022, with sales falling to their lowest level in nearly 30 years last year. This year's sales have remained slow, discouraging many prospective homebuyers. As a result, properties are taking longer to sell, leading to a higher inventory of homes on the market.
Investors, who can afford to bypass current mortgage rates by paying in cash or tapping home equity gains, are benefiting from this trend. According to BatchData, investors bought 1.2 million homes in 2024, up from an average of 1.1 million per year since 2020. However, institutional investors that own 1,000 or more homes account for only about 2.2% of all investor-owned homes.
The dominance of mom-and-pop investors and smaller institutions suggests a shift away from large-scale investments in the US housing market. Data from Parci Labs shows that six out of eight major companies owning and leasing single-family houses sold more homes in the second quarter than they bought, indicating a potential scaling back of home purchases by these large players.
