In the second quarter of 2025, investors made up 33% of all home purchases—the highest in five years – and the real estate investors were primarily small landlords, according to a report in Realtor.com.
More than 90% of investor-owned homes in the United States belong to small landlords with fewer than 11 properties, according to the latest Investor Pulse report from CJ Patrick Co. and BatchData.
Even in states with the highest rates of investor ownership, it’s not institutional buyers driving the trend.
The increase is not caused by a sudden surge in small landlords buying homes, but rather the fact that traditional buyers have pulled back in the face of affordability constraints.
With mortgage rates at 6.3% for the week ending Oct. 9, homeownership has become out of reach for many middle-income households, leaving cash-ready investors to fill the gap and keep housing transactions moving.
Small investors and small landlords are also more likely to renovate older housing stock and provide long-term rentals, especially in areas where affordability or geography limits new construction.
“Small investors have long been the dominant form of investor in the housing market,” said Hannah Jones, senior economic research analyst at Realtor.com, in a release. “Large investor activity picked up during the [COVID-19] pandemic when rents and home prices were climbing rapidly, but even then, large investors were not the majority nationally.
“Traditional homebuyers are looking for the right house in the right place at the right price,” she says. “Investors have more flexibility. They are not constrained by their household’s needs, but are rather looking for a good investment opportunity, which could come in various forms. Investors often have more access to capital as well, which allows them to navigate today’s high-priced market more effectively.”
Even as investor activity rises in some of these states, the report makes clear that many investor-held homes don’t stay in investor hands forever.
In the second quarter, 60% of investor sales went to traditional homebuyers, helping to replenish the owner-occupied stock rather than shrinking it. And with large institutional players retreating from the single-family rental market—selling off more homes than they purchased—small investors are increasingly the ones keeping local markets stable.
