Investor Home Purchases Drop to Lowest Level in 6 Years: Report

Home investor purchases across the United States saw a 6 percent year-over-year decline in the first quarter—marking the lowest level since 2020, according to a recent Redfin report.

The national real estate brokerage analyzed county sales records in the country’s 50 most populated metro areas from January 2000 through March 2026. It defines investor buyers as those with “LLC, Inc., Trust, Corp. or Homes” following their personal or company name. Ownership codes on purchasing deeds included either “association, corporate trustee, company, joint venture, or corporate trust.”

According to the report, real estate investors accounted for 19 percent of homes sold in the first quarter, down slightly from 20 percent a year earlier. Purchases of lower-priced homes dropped by 10 percent year over year to their lowest first-quarter level in 10 years, while condo buys experienced an 8 percent year-over-year decrease during the same time period.

Townhome investor purchases suffered the most, with a 13 percent decline. Redfin suggested that rising homeowner association fees and insurance costs may have played a role in the decline.

In total, investors held 7.8 percent of all listings in the quarter, the smallest share in five years.

“Higher mortgage rates, slowing price growth, and rising construction costs are giving both investors and individual homebuyers pause,” Tamara Mattox-Kabat, a Redfin Premier agent in Denver, said in the report. “Flippers and investors are scaling back, and being much more strategic when they do buy homes.”

She said they’re tending to gravitate toward less expensive materials and be more cautious about the timing of their projects so that they can list them during the stronger spring and summer seasons.

“It’s also noteworthy that large institutional investors are focusing more on building new homes than buying existing ones,” Mattox-Kabat said.

The report indicated that while mortgage rates skewed slightly lower in the first quarter, they remained at double the rates during the COVID-19 pandemic years. As a result, investors faced higher costs in buying properties, which in turn reduced their profits on flips or rentals.

In early May, the National Association of Realtors (NAR) reported that the median single-family home price increased by 0.5 percent year over year to $404,300, down from 1.2 percent growth in the fourth quarter of 2025.

Meanwhile, the average interest rate on a 30-year fixed-rate mortgage was 6.53 percent for the week ending on May 27, marking the highest level in nine months, according to Freddie Mac.

According to the Redfin report, some markets are cooling, and investors may have less confidence that home prices will rise quickly.

“At the same time, rising insurance premiums, property taxes, and maintenance costs are cutting into margins, particularly for smaller investors,” the report stated.

The median capital gain for investor-sold homes increased by 5.3 percent in the first quarter, far below the typical double-digit gains during 2020 and 2021, the report noted.

The drop in investor purchases was also attributed to economic uncertainty related to the war in Iran and a potential market slowdown, as investors may choose to preserve cash rather than expand their real estate holdings.

The Detroit metro experienced the largest annual drop in investor purchases, at 35 percent in the first quarter. Orlando investor buys fell by 25 percent, and Cleveland saw a 21 percent decline.

Those metros seeing an increase in investor purchases during the same time included San Francisco, with a 19 percent hike, and Virginia Beach, Virginia, with a 15 percent increase.

Meanwhile, the U.S. House of Representatives on May 20 passed an updated version of the 21st Century ROAD to Housing Act that would, among other things, restrict institutional investors from buying properties.

In a letter to Congressional leadership, NAR President Kevin Brown urged the bill’s passage. 

“This legislation confronts barriers to housing at all levels of government and represents the kind of comprehensive response needed to restore affordability and expand the dream of homeownership to more Americans,” Brown said in the letter.