Small Real Estate Investors Dominate Market Share in 2024: A Shift in the Real Estate Landscape

According to a new report from Realtor.com, small real estate investors have reached a record market share, accounting for 59% of all investor home purchases in 2024. This figure represents the "highest share in the data’s history" for entities that have bought ten or fewer homes, and marks a significant shift in the real estate market.

The number of homes acquired by small investors rose 3.7% year-over-year to hit 361,900 in 2024, while the share of investor home acquisitions by large investors reached the "lowest" level in 17 years. Entities that have bought at least 50 homes were responsible for 21.7% of all investor purchases last year.

Real estate investors made up 13% of home purchases last year, roughly 0.3 percentage points higher than 2023. This increase was attributed to a "decrease in total home sales" and signals a "growing presence of investors in a smaller market." Investors also resorted to debt more frequently to fund their real estate moves last year, with those using cash to buy properties dipping to 62.3%.

States such as Missouri, Oklahoma, and Kansas made up some of the largest percentages for home purchases by investors in 2024. Real estate investors sold 10.8% of homes that transacted across the U.S. in 2024, marking the "highest share on record" of the more than two decades Realtor.com has tracked it.

Daniellie Hale, chief economist at Realtor.com, said in a statement that the investor trends "signal a transition." "Nationwide, investors picked up more homes on net in 2024, as smaller investors were a growing majority of investor buyers," she said. "But with investor selling at a new high, the market saw the smallest net investor buying activity in five years, lessening one of the notable headwinds for entry-level buyers who often compete with investors."

As the housing market continues to adjust from the pandemic-era frenzy, inventory levels are improving, home price growth is leveling off, and rents are easing. In May, the U.S. was home to over 1 million active listings, up 8% from the prior month and 31.5% from a year ago, Realtor.com reported earlier in the month. The median asking price for homes was $440,000 in May.

In conclusion, small real estate investors are now dominating the market and showing a growing presence in a smaller market. As the housing market continues to adjust, it will be interesting to see how this trend will evolve and impact the overall real estate landscape.