If you’re in the market for a home, you may feel like you’re constantly competing with deep-pocketed Wall Street investors who seem to be snapping up every available property. Many believe that these large-scale investors are driving up home prices and making it difficult for everyday buyers to secure a property.

But the reality is different. Investor activity is actually on the decline, and the presence of massive institutional buyers is not as significant as some might think. Let’s break down the facts and dispel this common misconception.

Most Investors Are Everyday Individuals, Not Large Corporations

One of the biggest myths in real estate is that huge institutional investors dominate the housing market. In truth, that’s far from accurate. According to The Mortgage Reports:

“On average, small investors account for around 18% of the market, while mega investors represent only about 1%.”

The majority of real estate investors are small-scale individuals—people who own a couple of rental properties or a vacation home. These are not massive corporations buying entire neighborhoods but rather local property owners looking to generate rental income or build long-term wealth.

Institutional Investors Are Pulling Back

What about the large-scale investors that make headlines? Recently, even those institutional buyers—companies that own thousands of single-family homes—have been stepping back from the market.

Research from John Burns Research and Consulting (JBREC) shows that at their peak in Q2 2022, institutional investors accounted for just 2.4% of all home sales. However, by Q3 2024, that figure had dropped significantly to only 0.3%.

According to a recent report from ResiClub Analytics, institutional landlords continue to be cautious, particularly when it comes to scattered-site homes—single-family properties that are not clustered together in large communities. Many investors are opting for build-to-rent communities instead, as they offer more operational efficiencies. This shift further supports the idea that institutional investors are not dominating the overall market for single-family homes.

This decline indicates a major shift in investor behavior. Fewer institutional investors are competing for homes now compared to just a couple of years ago.

Why Are Investors Slowing Down?

Investors are becoming more hesitant to buy in today’s market, largely due to higher mortgage rates and rising home prices, which have made real estate investments less attractive. This means there are fewer big investors driving competition, opening up more opportunities for individual buyers.

The Bottom Line

The idea that Wall Street investors are buying up all the homes and pushing out everyday buyers is a misconception. In reality, large-scale investors are purchasing fewer homes than before. If you’ve been hesitant to enter the market because of investor competition, now may be a better time than you think.

Curious about what’s happening in our local market? Let’s connect and explore your options. With investor activity slowing down, you might have more opportunities to find the right home.