If you’ve been keeping an eye on the real estate market, you’ve likely noticed a significant shift in recent years. According to a recent report from Realtor.com, investor-owned home sales hit 11% of all U.S. home sales in 2024—the highest share since 2001. That translates to a whopping 509,000 properties sold by investors last year, a 5.2% increase from 2023. This surge in investor activity signals a dynamic market with both opportunities and challenges for real estate investors. Let’s dive into what’s driving this trend, what it means for your investment strategy, and how you can position yourself to capitalize on it.
The Numbers Tell the Story
The Realtor.com Investor Report paints a clear picture: investors are selling more properties than ever before, but they’re also buying at a brisk pace. In 2024, smaller investors—those with fewer than 10 properties—dominated the market, accounting for 59.2% of investor purchases, the highest percentage ever recorded. These “mom-and-pop” investors snapped up 361,900 homes, a 3.7% increase from the previous year. Meanwhile, larger investors with 50 or more properties saw their share of purchases drop to 21.7%, the lowest since 2007.
The median sale price for investor-owned properties was around $350,000, reflecting a focus on more affordable homes. Interestingly, investors paid a median of $282,000 for their purchases—over $70,000 less than the national median home price. This gap highlights a key strategy: investors are targeting budget-friendly properties in markets where they can maximize cash flow and returns.
Geographically, the Midwest and South led the charge in investor activity. States like Missouri (16.7% of sales), Oklahoma (16.7%), and Georgia (15.9%) saw the highest investor-driven sales, while Missouri (21.2%), Oklahoma (18.7%), and Kansas (18.4%) topped the list for investor purchases. These markets, known for their affordability, continue to attract investors who can’t compete in pricier coastal regions.
Why Are Investors Selling—and Buying—So Much?
The spike in investor sales reflects a shift in strategy. During the pandemic, many investors cashed in on soaring home values, flipping properties for hefty profits. But today’s market is different. “Investors may no longer be selling to cash in on soaring home values, but rather due to market softening and easing rents,” says Hannah Jones, senior economic research analyst at Realtor.com. High interest rates, economic uncertainty, and softening rental markets in some areas are pushing investors to offload properties that no longer meet their return goals.
On the flip side, investors are still buying aggressively, especially in affordable markets. The housing shortage, particularly in the Northeast and California, ensures steady demand for rentals, making these regions attractive for long-term holds. However, competition from larger players like Real Estate Investment Trusts (REITs) is heating up. REITs, with their deep pockets and ability to build brand-new rental communities, are drawing tenants away from smaller landlords in some markets, especially in the Sunbelt where construction has boomed.
Another factor driving investor activity is financing. Despite high interest rates, most investors—especially smaller ones—prefer using debt over all-cash purchases. In 2024, the share of cash purchases by small investors fell to 62%, the lowest since 2008, down from a peak of 65.6% in 2023. This suggests investors are leveraging mortgages to stretch their capital further, betting on long-term appreciation and rental income.
Opportunities for Investors in Today’s Market
So, what does this surge in investor activity mean for you? Here are a few key takeaways to guide your strategy:
1. Focus on Affordable Markets
The data is clear: investors are flocking to markets where homes are priced below the national median. States like Missouri, Oklahoma, and Georgia offer strong cash flow potential due to lower purchase prices and steady rental demand. If you’re just starting out or looking to scale your portfolio, these markets could be your sweet spot. Use tools like BiggerPockets’ Market Finder to pinpoint areas with high rent-to-price ratios and solid appreciation potential.
2. Adapt to Changing Tenant Dynamics
REITs and larger investors are reshaping the rental market by offering amenity-rich, brand-new properties. To compete, smaller investors need to focus on niche markets or underserved tenant bases. For example, the Northeast and California, where housing shortages are acute, offer a better chance of finding tenants despite higher purchase prices. Consider value-add strategies like upgrading kitchens or bathrooms to boost rent and attract quality tenants.
3. Leverage Financing Wisely
With cash purchases declining, now’s the time to explore financing options. Investor-friendly lenders offer products like DSCR (Debt Service Coverage Ratio) loans, which focus on a property’s rental income rather than your personal income. These loans can help you scale your portfolio without tying up all your capital in a single deal. Just be cautious—high interest rates mean you’ll need to crunch the numbers carefully to ensure positive cash flow.
4. Consider Alternative Strategies
If selling is on your radar, you’re not alone. But don’t rush to offload properties without exploring other options. For example, converting a long-term rental into a short-term or medium-term rental could boost your cash flow significantly. Or, if you’re sitting on equity, a cash-out refinance might give you the capital to buy another property without selling. BiggerPockets’ calculators, like the BRRRR or Short-Term Rental Calculator, can help you weigh these options.
5. Stay Ahead of Market Trends
The real estate market is always evolving, and staying informed is critical. Podcasts like BiggerPockets’ On The Market or resources like the BiggerPockets Blog offer insights into where the market is headed. For instance, experts predict that if interest rates remain high, rents could soften in oversupplied markets like the Sunbelt. Keeping a pulse on these trends will help you decide whether to buy, sell, or hold.
Challenges to Watch Out For
While the surge in investor activity creates opportunities, it also comes with hurdles. Here are a few to keep in mind:
- Competition for Affordable Homes: Budget-conscious buyers are increasingly competing with investors for low-priced properties. Investors often have an edge with all-cash offers or faster closings, but this competition can drive up prices in affordable markets.
- Softening Rents: In some regions, particularly the Sunbelt, an influx of new construction is putting downward pressure on rents. If you’re investing in these areas, ensure your numbers still pencil out with conservative rent projections.
- High Interest Rates: Financing is still a viable strategy, but high rates can eat into your cash flow. Work with an investor-friendly agent or lender to find deals that work in today’s rate environment.
- REITs and Institutional Investors: Larger players are muscling into the single-family rental market, especially in fast-growing regions. Their economies of scale and marketing power can make it tougher for smaller investors to compete for tenants.
My Take: Why This Matters
As someone who’s been in the real estate game for years, I see this surge in investor activity as a sign of a resilient market. Investors are adapting to new realities—higher rates, softening rents, and increased competition—by focusing on affordable markets and creative strategies. But it’s also a reminder that real estate investing isn’t a one-size-fits-all game. Whether you’re a seasoned investor or just starting out, you need to run the numbers, stay informed, and be ready to pivot when the market shifts.
I’ve seen firsthand how markets like Missouri and Oklahoma can deliver steady cash flow, but I’ve also watched investors struggle in oversaturated areas where rents didn’t keep up with expectations. The key is to know your market, know your numbers, and have a clear strategy—whether that’s buying and holding, flipping, or exploring short-term rentals.
What’s Next for Investors?
The real estate market in 2025 is shaping up to be a mixed bag. Redfin’s 2025 housing market forecast predicts continued price softness in many markets, which could create buying opportunities for investors willing to act. At the same time, builders are getting bullish, especially in the Sunbelt, which could mean more competition for rentals down the line.
If you’re ready to jump in or scale your portfolio, now’s the time to get strategic. Start by analyzing markets with strong cash flow potential, connect with investor-friendly agents, and run your numbers like a pro. And don’t go it alone—tap into communities like BiggerPockets to learn from other investors who’ve been where you are.
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Sources and References
- Realtor.com Investor Report, 2024: Realtor.com
- BiggerPockets Blog, “Investor Home Sales Reach Highest Share Since 2001”: BiggerPockets
- Redfin 2025 Housing Market Forecast: Redfin
