Investors Are Paying Up to 35% Above the Median Sales Price, Adding Pressure for Everyday Homebuyers
Investors' share of home purchases edged higher in Q2 2025 as typical buyers pulled back amid affordability challenges
AUSTIN, Texas, Nov. 6, 2025 /PRNewswire/ -- Investors are continuing to impact local housing markets, both paying a premium to buy in high-cost areas and capitalizing on affordability in lower-priced regions, according to Realtor.com®'s Investor Report Mid-year Update.
In Western and coastal states such as Montana, Utah, and California, where housing affordability is most stretched, median investor purchase prices reach up to 35% above the typical local sales price. At the same time, investors in more affordable states like Michigan, Maryland, and Virginia are targeting lower-priced homes, some in excess of 50% below typical sales prices.
"Even as investors pull back from pandemic-era activity, they're facing fewer headwinds than many typical buyers," said Danielle Hale, chief economist at Realtor.com®. "With affordability still stretched and inventory tight, many would-be buyers remain sidelined, giving investors a larger share of the market and, in some areas, more influence over prices. As a result, investor activity can amplify price pressures, especially in markets where their purchases concentrate in already competitive price ranges."
Overall home sales declined 4.2% in the second quarter of 2025 compared with the same period one year ago, but investor purchases fell just 2.7%, giving investors a greater presence in a smaller market. Investors continued to buy more homes than they sold and their overall market share slightly increased to 10.8% of all homebuyers during the second quarter up from 10.7%, helping drive prices upward in markets where competition for homes remains intense.
Investors Pay Up to 35% Above Market, Contributing to Competition in Western and Coastal Regions
In several Western and coastal states, investors paid far more than typical buyers. In Montana, for example, the median investor purchase price was 35.1% higher than the state's median sale price, followed by Utah (+33.7%), California (+23.3%), New York (+12.3%) and Vermont (+3.2%). These premiums often reflect high-end or short-term rental strategies in luxury and lifestyle markets, or competition for limited housing stock in high-demand areas such as California and New York.
Among major metros, investors paid the largest premiums in Los Angeles (+19.8%), San Diego (+9.2%), New York City (+8.7%), San Francisco (+6.8%) and Nashville (+3.4%), where rental demand remains strong and affordability constraints continue to sideline typical buyers.
Top 5 States Where Investors Pay Above Median Purchase Amount
State | Investor Buyer | Median Overall | Investor Purchase |
Montana | $574,000 | $425,000 | 35.1 % |
Utah | $667,000 | $499,000 | 33.7 % |
California | $909,000 | $737,000 | 23.3 % |
New York | $554,000 | $493,000 | 12.3 % |
Vermont | $382,000 | $370,000 | 3.2 % |
Discounts in Some Midwest and Mid-Atlantic Markets Exceed 50%
Investors in more affordable states are aiming for lower-priced properties. The largest gaps between investor and overall purchase prices were seen in Michigan (-53.1%), Maryland (-45.4%), Virginia (-45.0%), Delaware (-41.4%) and Wisconsin (-40.7%). These discounts show that investors are targeting lower-priced homes and entry-level stock, which often provide the best rent-to-price ratios and long-term income potential.
At the metro level, investors found the steepest discounts in Detroit (-58.0%), Pittsburgh (-52.7%), Baltimore (-52.0%), Cleveland (-51.4%) and Milwaukee (-50.1%), markets that combine affordable housing with stable rental demand and opportunities for renovation.
Top 5 States Where Investors Pay Below Median Purchase Amount
State | Investor Buyer | Median Overall | Investor Purchase |
Michigan | $118,000 | $252,000 | -53.1 % |
Maryland | $231,000 | $424,000 | -45.4 % |
Virginia | $230,000 | $418,000 | -45.0 % |
Delaware | $238,000 | $407,000 | -41.4 % |
Wisconsin | $175,000 | $296,000 | -40.7 % |
Affordable Markets Continue to Attract the Most Investor Buyers
Overall, investor participation remained concentrated in affordable, high-demand regions. Missouri (18.9%), Mississippi (17.1%) and Nevada (15.4%) recorded the highest investor buyer share of home purchases, followed by Indiana (14.3%) and Alabama (14.2%). Among the 50 largest U.S. metros, Memphis (25.2%), St. Louis (20.6%) and Kansas City (19.3%) led the nation in investor buyer share.
Highest Investor Share Among Top 50 Metros
Metro | 2025 Q2 | Y/Y |
Memphis, TN-MS-AR | 25.2 % | 4.7 % |
St. Louis, MO-IL | 20.6 % | 1.1 % |
Kansas City, MO-KS | 19.3 % | 1.7 % |
San Antonio-New Braunfels, TX | 18.0 % | 3.7 % |
Birmingham, AL | 17.6 % | 1.1 % |
Las Vegas-Henderson-North Las Vegas, NV | 16.8 % | 3.9 % |
Columbus, OH | 16.4 % | 6.0 % |
Dallas-Fort Worth-Arlington, TX | 16.1 % | 2.4 % |
Oklahoma City, OK | 15.5 % | -3.2 % |
Indianapolis-Carmel-Greenwood, IN | 15.1 % | 1.1 % |
Investors Bought 41,000 More Homes Than They Sold, Adding Pressure to Prices
In the second quarter of 2025, investors accounted for 10.8% of all home purchases, up slightly from 10.7% one year ago and just below the 2022 peak of 12.1%. In the first half of 2025, investors bought roughly 41,000 more homes than they sold, a wider gap than the same period last year, as selling activity slowed. Put simply, this wider gap means that investor competition with buyers has intensified.
The trend marks a shift from 2024, when a pickup in investor selling had briefly eased competition for buyers. In 2025, fewer investor listings mean less inventory on the market, even as overall buyer demand remains subdued.
"We're seeing a clear split in investor strategy," said Hannah Jones, senior economic research analyst, Realtor.com®. "Some investors are doubling down on affordability and rental yield, while others are willing to pay a premium for markets with persistent housing shortages and strong rental demand. Both approaches reflect confidence that housing demand, and rent potential, will remain strong over time."
Methodology
In this analysis, Realtor.com® examined deed records from January 2000 through July 2025 at the national, state, and metro levels, focusing on single-family homes, condos, townhomes, and row houses. Multifamily properties, homebuilders, and government or financial institutions were excluded. Investors were defined as absentee-owner buyers or sellers with names containing LLP, LP, LLC, GP, or TRUST.
About Realtor.com®
Realtor.com® pioneered online real estate and has been at the forefront for over 25 years, connecting buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 site trusted by real estate professionals, Realtor.com® is a valued partner, delivering consumer connections and a robust suite of marketing tools to support business growth. Realtor.com® is operated by News Corp (NASDAQ:NWS, NWSA]) [ASX: NWS, NWSLV] subsidiary Move, Inc.
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SOURCE Realtor.com