Real Estate Investors Expand Market Share in 2025

Nearly 27% of all homes sold in the U.S. during the first quarter of 2025 were purchased by real estate investors, a total of 265,000 properties.

That’s the highest share of investor activity in at least five years, according to real estate data provider BatchData. For comparison, investor purchases averaged 18.5% between 2020 and 2023.

Why Investor Activity Is Rising

Although it may not feel like it in Minnesota, home sales have slowed nationwide due to rising mortgage interest rates that began climbing in 2022. As a result:

• Homes are sitting longer on the market
• Inventory is building up
• Buyers, including investors, have more bargaining power

This environment has created a window of opportunity for those looking to invest in residential real estate.

Who Are These Investors?

Despite popular belief, this surge isn’t driven by institutional investors or large hedge funds.

In fact, 85% of single-family investment homes are owned by small, “mom-and-pop” landlords. These are everyday investors who typically hold between 1 and 5 rental properties, not massive portfolios.

Last year alone, investors bought 1.2 million homes, a 9% increase over the previous year.

Investors Now Own 1 in 5 U.S. Single-Family Homes

Today, real estate investors own about 20% of all single-family homes in the United States. As more investors seek long-term rental income, passive cash flow, and portfolio diversification, this number is likely to continue growing, especially in markets with rising rents and population growth.

Bottom Line: Whether you’re a first-time buyer or looking to scale your real estate portfolio, understanding investor trends in the housing market can help you make smarter moves, especially in a shifting market like 2025.