Investors Are Selling a Record Share of Homes To Cut Their Losses—Especially in These 5 States

Yahoo

21 hours ago

Individual homeowners hesitated to list their homes last year due to surging mortgage interest rates—but real estate investors plowed right ahead, pushing the share of homes they sold to an all-time high.
In 2024, just under 11% of all homes sold in the U.S. came from real estate investors, the highest share in the data's history going back to 2001, according to the latest Realtor.com® Investor Report released on Tuesday. The median sale amount for investor properties was about $330,000.
Investor home sales ticked up by 5.2% year over year in 2024, outpacing the increase in investor buyer activity.
Looking at the raw sales numbers, investors offloaded about 509,000 properties last year, which was fewer than in 2021 and 2022, but significantly higher than pre-pandemic levels.
'The reason behind investor sales has shifted since the [COVID-19] pandemic heyday,' says Realtor.com senior economic research analyst Hannah Jones. 'Investors may no longer be selling to cash in on soaring home values, but rather due to market softening and easing rents.'
Simply put, investors who own rental properties saw rent prices begin to slip, and they sprang into action to cut their losses.
Of all 50 states, Missouri and Oklahoma saw the highest share of investor sellers in 2024, at 16.7% each, up 0.5% and 1.7% from 2023, respectively.
Georgia came a close second, with investors making up 15.9% of all home sellers last year, followed by Kansas with 14.3%.
Utah rounded out the top five, with investors accounting for 14.3% of all sellers in the state in 2024.
What's more, the list of top states for investor sellers looks similar to the top regions for investor buyers, suggesting that certain markets attract heightened investor activity across the board.
Overall, 13% of homes purchased in 2024 were snapped up by investor buyers, up only slightly from 12.7% the year before, according to the new report.
'Though modest, this increase in investor home purchases came at a time when overall home purchasing slumped, resulting in an uptick in investor buyer share,' explains Jones.
Missouri saw the highest share of investors buying homes, at 21.2%, followed by Oklahoma, at 18.7%, and Kansas, at 18.4%. Utah and Georgia notched the two final spots in the top five, at 18% and 17.3%, respectively.
The common denominator among these five states, according to economists, is that they are generally affordable but have higher rental prices than the national median, making those areas especially attractive to investors.
'Buying a home is still relatively affordable in these states, making them more hospitable for investors,' adds Jones. 'Overall buyer activity has pulled back significantly as housing costs have climbed over the last few years. Investor activity has mirrored this pullback to some degree, but investors continue to find opportunities in low-priced markets with strong demand.'
A closer look at investor hot spots shows that out of the 50 largest metro markets, Memphis, TN, Oklahoma City, St. Louis, Kansas City, MO, and Birmingham, AL, saw the highest investor buyer shares.
Jones points out that the top 10 markets for investor buyers were all clustered in the South and Midwest—the two most budget-friendly U.S. regions.
Mirroring state-level trends, the cities with the highest percentages of investor buyers also tended to have a higher share of investor sellers—with Memphis, Oklahoma City, and Kansas City topping the list.
Looking at this data analysis, a key question arises: Do investor buyers help or hurt the housing market? Perhaps unsurprisingly, the answer is not straightforward.
The U.S. as a whole continues to suffer from a severe housing supply shortage, now estimated at roughly 4 million homes. While investor buyers help make more rental units available, their purchasing sprees tend to make for-sale inventory ever more scarce, because they compete directly with individual homebuyers.
Last year, the typical investor bought a home for $282,000, more than $70,000 below the national median sale price. These figures indicate that investors gravitate toward the most affordable markets and are drawn to cheaper properties, which they can then rent out to turn a profit.
'As a result, budget-conscious buyers often find themselves in direct competition with investors for the most affordable properties, a contest many are unable to win,' says Jones.
Notably, the push to sell affected all investor groups across the board, from mom-and-pop outfits to big-time players in the industry.
Realtor.com economists define small investors as those who have bought fewer than 10 homes under their entity, medium investors as 10-50 purchases, and large investors as more than 50 purchases.
Jones stresses that all three types of investors sold more homes last year compared with 2023, signaling a shift in the market.
Small-time investors offloaded a total of 270,000 homes in 2024, the third-highest number in the data's history, behind 2021 and 2022.
On the other hand, major investment firms sold 123,800 homes, higher than the previous year, but lower than in 2021 and 2022.
Meanwhile, while all investor sizes bought more homes than they sold in 2024, the gap was the smallest in the data's 24-year history for large and medium investors.
Big-time players purchased only 8,700 more homes than they sold in 2024, down from 134,000 more homes bought than sold by this group at the peak in 2021.
Medium investors bought fewer than 250 more homes than they sold in 2024. That's down from 25,000 more homes they bought than sold in 2022.
In this analysis, Realtor.com economists examined deed records for single-family homes, condos, townhomes, and row houses dating from January 2000 to February 2025 nationally, on the state level and in the 50 largest metros.
Economists looked only at absentee owners with a name that includes 'LLP,' 'LP,' 'LLC,' 'GP,' or 'TRUST,' and excluded keywords and sales that were likely related to homebuilders, relocation companies, government bodies, and financial institutions.
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