Are you looking to buy a home but feel like you’re competing against wealthy Wall Street investors scooping up every property? Many believe that mega investors are driving up prices and dominating the market, making it tough for everyday buyers like you.
But here’s the reality—investor purchases are actually decreasing, and the big players aren’t as active as they seem. Let’s break down the facts and clear up this misconception.
Most Investors Are Small, Not Mega Investors
Many people believe that large institutional investors are taking over the housing market, but that’s not actually the case. According to The Mortgage Reports:
“On average, small investors account for around 18% of the market, while mega investors represent only about 1%.”
The majority of real estate investors are actually small-scale, mom-and-pop owners who have just a few properties—not massive corporations buying entire neighborhoods. They’re everyday people, like your neighbors, who may own a rental home or a vacation property.
Investor Home Purchases Are Dropping
What about the big investors making headlines? Recently, institutional investors—the ones often in the news—have scaled back and aren’t purchasing as many homes.
According to John Burns Research and Consulting (JBREC), even at their peak in Q2 2022, institutional investors (those owning 1,000+ single-family homes) accounted for just 2.4% of home sales. Since then, that number has dropped significantly, falling to just 0.3% by Q3 2024 (see graph below).
That’s a significant change, showing that far fewer investors are competing in the market compared to just a few years ago.
So, why are investors pulling back? The main reason is that higher mortgage rates and rising home prices have made buying less appealing for them.
The notion that Wall Street investors are snatching up all the homes and shutting out regular buyers is a myth. While some investors are still active, they’re not nearly as aggressive as they were in previous years.
Bottom Line
Large institutional investors aren’t taking over the market—in fact, they’re buying fewer homes than before. Let’s connect and discuss what’s happening in our local market. You might have more opportunities than you realize!
