Stubbornly elevated mortgage rates and home prices are discouraging investor activity in the U.S. housing market. According to a new report from CoreLogic, while investor activity rose slightly between the second and third quarters of 2024, their market share remains below last year’s level—25% compared to 28% in 2023. CoreLogic predicts that investor market share will likely remain steady unless mortgage rates drop.
Shifting Investor Trends
“As the total number of purchases continues to slide, interest rates remain elevated, housing prices are high, and economic conditions are in flux,” said Thomas Malone, Professional, Economist in the Office of the Chief Economist at CoreLogic. “Faced with these headwinds, it is not clear what may draw investors back into the market at previous levels.”
Investor activity surged in recent years when mortgage rates hit historic lows. Before the pandemic, investors accounted for less than 20% of the market, but this figure peaked at nearly 30% in January 2024. Despite the slowdown, lower-priced homes remain a battleground for competition between first-time buyers and investors.
Impact of ‘Mom-and-Pop’ Investors
The report highlights the significant role of small-scale investors, often referred to as “mom-and-pop” landlords. These individuals, owning three to ten properties, represent 60% of all investor purchases. “Smaller-scale investors play a powerful but understated role in the market, buoying home prices even as overall demand has softened,” Malone noted.
In contrast, large investors (owning 100 to 1,000 properties) and mega investors (owning more than 1,000 properties) make up a very small portion of the market. In Los Angeles—the U.S. city with the highest investor share—42% of 2024 home purchases were by investors, yet only 2% were from mega investors.
Regional Variations
Investor activity varies widely across the country. Atlanta recorded the second-highest share of investor transactions in 2024 at around 35%, followed by Riverside, California, and Las Vegas. Minneapolis had the lowest investor market share among the top 20 metros at just over 20%.
The Bottom Line
Although a pullback in investor purchases may alleviate some pressure on prospective homeowners, competition remains steep, particularly in the lower-priced tiers. These trends underscore the critical yet understated role of small-scale investors in shaping the U.S. housing market.
Click here for more on Malone’s report for CoreLogic.
