I
nvestor participation in the US housing market is stabilizing after a tumultuous period during the pandemic. According to Redfin's latest data, investors purchased 2.3% fewer homes in the third quarter of 2024 compared to the same period last year, with 49,380 homes bought. This figure aligns with pre-pandemic averages and marks a significant drop from the peak of 100,000 quarterly purchases in 2021.

    The total dollar value of investor transactions increased by 3.4% year-over-year to $38.8 billion, keeping pace with rising home prices. Redfin senior economist Sheharyar Bokhari notes that investors are finding a balance after years of rapid buying and selling. "Now there's a middle ground," he said.

    Several factors have tempered investor activity, including declining profit margins on flipped homes and increased apartment construction stabilizing rents. The average profit margin on home flips dropped to 55% in October, down from 64% a year ago. Investor market share in home sales also decreased to 15.9%, the lowest in four years but still near pre-pandemic norms.

    Florida, a traditional hotspot for real estate investment, saw significant pullbacks due to higher home insurance costs and growing concerns about natural disasters. However, some markets are bucking the trend, with investor activity surging in Las Vegas (27.6% increase) and Seattle (21.8% increase). Investors continue to prioritize single-family homes, which accounted for nearly 70% of purchases in the third quarter.