Investor activity in the housing market remained steady last year—but mom-and-pop investors are taking a larger slice of the pie, according to a new report.
The share of home sales to investors ticked up slightly to 11.3% in 2025, up 0.3 percentage points compared to the year before, a new investor report from Realtor.com® shows. In total, investors bought 534,000 homes and the median investor purchase amount rose 5.6%. That outpaced the overall sale price increase and suggests that the gap between investor and noninvestor purchases is narrowing.
Small investors, though, continue to be the big buyers. Collectively, they accounted for two-thirds of all purchased housing stock. Large investors are down almost 70% from 2021. “Mega” investors, or those who own 350 or more homes, have declined by a more modest 30% in that time.
Last year’s data doesn’t account for the market reactions to the landmark housing bill in Congress this year. President Donald Trump began scrutinizing large investors’ role in the housing market in early 2026. Congress followed with the 21st Century Road to Housing Act, with its controversial limitations on investors in the housing market.
The market is much changed since the COVID-19 pandemic, when buyers were competing with investors for a small pool of available homes, Realtor.com senior economist Hannah Jones says.
“Since then, the housing market has changed markedly. Inventory levels in many areas have returned to, or even exceeded, pre-pandemic norms, while home price growth has moderated and rent increases have slowed,” Jones says. “In 2025, investor buyer activity held relatively steady both in terms of purchase count and market share.”
Where are investors buying homes?
The Midwest and the Sun Belt remain popular destinations for real estate investors, Realtor.com data found. The former boasts an abundance of affordable cities, while the latter is poised for continued population growth.
Memphis, TN, saw the highest share of investor activity, with investor buys accounting for 23.7% of the market’s activity. Kansas City, MO, and St. Louis followed, with investors accounting for 21.2% and 21.1% of purchases, respectively. Birmingham, AL, and Oklahoma City rounded out the top five.
Atlanta, in the meantime, is no longer one of the most active cities for investor interest. Instead, investors were net sellers in that city, offloading 1,800 units, the largest sell-off of any one metro.
Indeed, large investors have homed in on Midwest and Sun Belt markets for their relative ease in building an inventory.
Lincoln Palmer, COO at single-family investor American Homes 4 Rent, said in a May earnings call that the Midwest housing market is stronger. Other areas of the country will need to catch up.
“The performance in the Midwest is projected to be very strong for the next several years,” Palmer said. “Rate growth, as an example, migration, and supply all seem to have great profiles for several years now. As the other markets improve, I’m sure that we’ll see some convergence of those.”
Meanwhile, real estate data analytics firm ATTOM found that the typical profit for flipping a home is rebounding this year from lows that stretch to the Great Recession. That gives more incentive for investors to look at old and poor-condition homes.
Will institutional investors completely back out of the market?
The housing bill, and the scrutiny of investors that followed, is sure to play into the market dynamics. But those large investors, who hold more than 350 homes, had already been slowing their activity for years.
These trends are “the new baseline,” says Jones.
“The composition shift away from mega-investors removes one source of potential future surge, but it also removes the most likely source of large-scale market exit,” Jones says. “What remains is a structurally embedded small-investor presence that is particularly acute in affordable Midwest and Sun Belt markets where the competition with first-time buyers is most direct.”
Jeff Holzmann, COO of Dallas-based real estate investment firm RREAF Holdings, tells Realtor.com that he thinks the ban will reduce competition and stabilize prices for homebuyers in the coming years.
“It’s uncommon to see Wall Street buy entire neighborhoods,” Holzmann says. “But the reality is, when your home is owned by a Wall Street company, what happens is it becomes someone else’s product. When there’s a board yelling at a CEO to make more money, the only way to do it is to raise the rent.”
