Investors Have Purchased 30% of Available Home Inventory in 2025

New York, NY, July 28, 2025-"Individual homebuyers are largely locked out of the housing market as home prices continue to climb and interest rates remain stuck. But investors are buying, and dominating the market,” reports the Wall Street Journal.

“So far in 2025, investors who buy homes to flip or rent out have made up about 30% of purchases of both existing and newly built single-family homes, the highest share on record, according to property analytics firm Cotality, which started tracking the sales 14 years ago.

“There is also a change in the makeup of single-family residential investors, who have become a powerful force in the U.S. housing market. This buying group was once flooded with large private-equity firms such as Blackstone and Starwood Capital Group. 

“But in the first half of this year, small investors made up about 25% of these home purchases while large investors accounted for about 5% on average, according to Cotality’s data. This shift happened mostly because large investors and traditional home buyers have slowed down while small investors are holding steady.

“Small investors, who own fewer than 100 homes, are securing more discounts and financial incentives from sellers eager to close deals quickly as inventory piles up and traditional home-buyers sit on the sidelines, waiting for stubbornly high prices to fall. 

“‘It’s not just the Blackstones of the world anymore,’ said Rajan Bhatt, president of Strand Capital, which has purchased about 100 homes in markets including Chattanooga, Tenn., and Indianapolis.

“Home investors, of course, also are sensitive to the high prices and interest rates that have made this year’s selling season a dud. Some large buyers that pioneered the real-estate investment business after the global financial crisis are slowing down their acquisitions as costs surge.

“Local and federal regulators also have been cracking down on investors buying up homes, which they claim makes it harder for regular buyers to compete and drives up prices even further.

“Big investors Invitation Homes, Progress Residential and Amherst are all disposing of more homes than they are buying so far this quarter, according to data from real-estate analytics firm Parcl Labs.

“‘We’re acquiring at a fraction of what we were several years ago,’ partly because of high interest rates, said Chris Avallone, chief financial officer of Amherst, which owns about 46,000 homes. 

“So why are smaller investors more active? For starters, even with prices and interest rates high, they still see a solid business in buying, fixing up and renting out single family homes. 

“Strand Capital, the small real-estate private-equity firm, targets single-family homes within the $250,000 price range. It will make about a $75,000 down payment and invest up to $15,000 in light renovations. It will then charge $2,000 to $2,200 a month in rent, with the expectation that the home price will appreciate 5% each year. After three years, Strand will try to sell the home at a profit.”