Little attention has been paid to the role of small investors in the U.S. housing market, but they make up to 60% of all investor purchases, according to a new analysis by CoreLogic.
In the top 20 MSAs, most investors are small (defined as owning less than 10 properties at the time of purchase) or medium (10 and 100 properties). Large (100-1000 properties) and mega (1000+ properties) make up a very small share of total purchases, the report stated. “There is no MSA where mega-investors make more than 5% of the purchases.”
In the first three quarters of 2024, Los Angeles had the highest share of investor-owned homes in the nation (42%), with small-investors making up more than half the total and mega-investors only 2%. “Although the MSA has a large population, it has low transaction levels. Despite this, it has the fourth-highest level of investment activity in the nation,” the report commented. In all 20 metros, small investors accounted for 20% to 25% of home ownership.
Recommended For You
The MSAs with the highest level of investor activity in 1H 2024 were Dallas, Houston, Atlanta, Los Angeles, Phoenix, Chicago, and New York. Atlanta also had the highest level of mega-investors.
CoreLogic predicted only a slight increase in investor activity in the coming months – remaining at around 25% of total sales due to high mortgage rates and home prices. It noted a seasonal pattern for home buying, with owner-occupiers most notable in summer and fewer investors, a pattern that reverses in the fall.
“In Q3 of 2024, investors averaged 21,000 purchases per month less than in Q3 of 2023. The decline to 85,000 monthly investor purchases this quarter is even more pronounced when compared to the third quarter of 2021 and 2022, when the average number of purchases per month was 140,000 and 120,000, respectively,” the report found.
The report also noted the conflicts investor purchases can create. It pointed out that investors prefer cheaper and average-priced homes that are more in tune with renter demand. However, that also puts the sector in competition with first-time home buyers. And the changes investment sometimes creates by “redefining neighborhoods” and raising rents accordingly can create tension with long-time residents and risk exacerbating housing shortages, it said.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
