Special offer

How Many Homes Are Investors Actually Buying?

By
Real Estate Agent with PHP Houses SL3302417

Are big investors really buying up all the homes today?

If you’re trying to find a house to buy, this may be something you’re wondering about. Maybe you’ve read about it or seen reels on social media saying investors buying all the homes is making it even harder to find what the average buyer is looking for. But spoiler alert – there’s a lot of misinformation out there. To clear things up, here's the scoop on what's really happening. A lot of the big investor activity is actually in the rearview mirror already.

The Wall Street Journal (WSJ) explains:

“Investors of all sizes spent billions of dollars buying homes during the pandemic. At the 2022 peak, they bought more than one in every four single-family homes sold, though more recently their activity has slowed as interest rates rose and supply became tighter.”

The key here is investor activity has slowed significantly, and even during the peak of investor buying, 3 out of every 4 single-family homes purchased were by regular, everyday buyers – not investors. And of the investors who bought over the past few years, most weren’t the big investors you may be hearing about. The vast majority were small mom-and-pop investors – people like your neighbors who own only a couple of homes, maybe even just their main residence and a vacation home.

But let’s focus on the giant, mega-investor firms since that's what is being talked about so frequently on social media right now. Mega investors are those who own 1,000+ properties. You may be surprised to see that, according to the Wall Street Journal, they don’t buy all that many homes (see graph below):

This graph tells us two things. First, institutional investors were never buying a large percentage of available homes. During the peak in 2022, they bought about 2% of available single-family homes. Second, that percentage has gotten even smaller recently (so small the number rounds down to 0%).

In an effort to understand why that percentage is trending down, private lender RCN Capital asked investors about the challenges they’re facing. Here’s what Jeffrey Tesch, CEO of RCN Capital, found out:

“Investors are already facing many challenges in today’s housing market – rising prices, limited inventory, and higher financing costs.”

Understanding these challenges is important because they show big, mega investors aren’t taking over the housing market.

So, don't fall for everything you hear. They aren't snatching up all the homes and making it impossible for regular people to buy

Bottom Line

Big investors aren’t buying all the homes out there. If you've got questions about what you're hearing about the housing market, let's chat. I can help you understand what's really going on.

 

Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 641-1531
Fax: (407) 205-1951
email: info@phphouses.com

Let’s Connect:
Facebook
Linkedin
Twitter
Instagram

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. The author does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. The author will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Walter, As always another great blog that you are sharing with us today in the Rain.  Make it a great day!

May 22, 2024 09:51 AM
Walter DiLoreto

Thanks Will!!!

May 23, 2024 07:35 AM
George Souto
George Souto NMLS #65149 - Middletown, CT
Your Connecticut Mortgage Expert

Walter DiLoreto my Borrowers are still running into a number of cash offers, but it is hard from my end of the business to determine if they are investors or not.  Low inventory is still the biggest factor in my opinion.

May 22, 2024 02:19 PM
Richard Weeks
Dallas, TX
REALTOR®, Broker
Great information, thanks for sharing.  I hope you have a great day.
May 23, 2024 03:19 AM
Walter DiLoreto

Thanks, you too.

May 23, 2024 07:35 AM
Wayne Martin
Wayne M Martin - Oswego, IL
Real Estate Broker - Retired

Good morning Walter. All the hype is foolish nonsense from a press that bites at the apple easily. The wise agent knows better. Enjoy your day.

May 25, 2024 04:39 AM
Walter DiLoreto
PHP Houses - Lake Mary, FL
Real Estate Short Sale Specialist

Good morning Wayne. You're absolutely right. Have a nice weekend.

May 25, 2024 06:35 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Walter DiLoreto,

Low inventory is definitely affecting the prices and competition for buyers. You are right understanding the challenges is important because they show big, mega investors aren’t taking over the housing market. The media is so out in left field.

May 25, 2024 07:33 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

People have been buying Rental Properties for hundreds or years ………………………

May 26, 2024 07:13 AM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

I have not encountered any information about mega-investors in our area.

May 27, 2024 08:01 AM