The big institutional players that dominated the pandemic-era housing frenzy are stepping back, and a different kind of buyer is filling the gap.
A fresh report from Realtor.com shows that investors bought 11.3% of all U.S. homes in 2025, edging up from 11.0% the year before. That works out to roughly 534,000 investor-purchased homes, a 0.7% increase from 2024. During the same period, regular homebuyers pulled back - their purchase volume dropped 2.1%.
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Investors also slowed their selling. Last year, investors sold roughly 442,000 homes, a 1.5% decline from 2024 and the smallest annual total since 2020. The buy-versus-sell spread reached about 92,000 homes, indicating that investors continue adding to their holdings even with mortgage rates still elevated.
The most striking shift is who is doing the buying.
Buyers who made fewer than 10 deals each accounted for roughly 63% of all investor purchases in 2025 - the biggest share for small-scale investors in over 15 years. On the opposite side, mega-investors - groups completing 350 or more deals - made up only 7.5% of investor purchases, their lowest portion since 2011. Their deal volume has dropped almost 70% compared to the 2021 high point.
Small investors ended 2025 as net buyers by roughly 53,000 properties, while large institutions shifted into a net-selling position.
"The investor market has found a new equilibrium," said Hannah Jones, senior economist at Realtor.com. "With small investors now comprising nearly two-thirds of all investor purchases and large institutional players continuing to pull back, the dynamics shaping competition in entry-level housing are shifting - but that competition hasn't gone away."
The changing investor mix has real implications for lenders. Large institutions typically rely on corporate financing or private capital. Smaller investors, by contrast, often use debt-service coverage ratio (DSCR) loans and other Non-QM products to fund their purchases. With investor activity spreading away from a handful of large players, lenders that cater to independent buyers could see consistent demand even while the rest of the housing market deals with affordability problems and scarce inventory.
Investor dollars are flowing most heavily into affordable parts of the Midwest and Sun Belt.
Among the 50 biggest U.S. metro areas, Memphis had the highest investor share at 23.7% of all home purchases. Kansas City came next at 21.2%, followed by St. Louis at 21.1%, Birmingham at 21.0%, and Oklahoma City at 17.9%. These cities share qualities that draw investors: home prices that remain within reach, solid rental demand, and enough inventory to support positive cash flow even when borrowing is expensive.
In pricier markets, investor activity was far lighter. Portland, Oregon; Sacramento, California; and Hartford, Connecticut each recorded investor shares around 6%, well under the national figure. Realtor.com attributed the gap to high entry costs and thin rental returns in those areas.
Total home sales have fallen more than 25% from the 2021-2022 peak, but investor buying has held up better. Measured against pre-pandemic levels, overall sales are down 14.3% while investor purchases are up 14.6%.
Realtor.com's data suggests the market is settling into a pattern where investors regularly account for more than one out of every 10 home sales.
"Investor purchase share has now held above 11% for three consecutive years," Jones said. "With small investors comprising two-thirds of all investor activity, that floor is unlikely to erode quickly even if financing conditions remain challenging."
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