Investors Snatch Record 14.8% Of Homes – What Does It Mean For Regular Homebuyers Being Pushed Out Of The Market In These Top Cities?

Investors are often cash buyers with deeper pockets and more leverage to close a deal fast, making it difficult for the average homebuyer to get in on a deal. In hot markets, where property prices are low, but rent prices are high, investor buying has reached a new high.

Is there a risk for would-be first-time homebuyers? Of course. No one wants to compete with an all-cash, full-time offer that many investors, especially large investment firms, can make. 

Don't Miss:

• Rory McIlroy’s mansion in Florida is worth $22 million today, doubling from 2017 — here’s how to get started investing in real estate with just $100
• Commercial real estate has historically outperformed the stock market, and this platform allows individuals to invest in commercial real estate with as little as $5,000 offering a 12% target yield.

According to a report compiled by Realtor.com based on deed records nationwide, small investors outpaced large investment firms in the 150 largest U.S. metros for single-family homes, condos, townhomes, and row houses from January 2000 to March 2024. 

There’s a good chance you’re friends with a small investor who has bought fewer than 10 properties since 2001. From January to March 2024, small investors made up 62.6% of investor purchases, up 6.4% from the same period in 2023. Is that any better for a community? While the local connection could be a plus, investors aren’t necessarily buying close to home. 

Instead, they’re buying mostly in the same Midwest and Southern metropolitan areas that are affordable for first-time homebuyers. While adding to the rental property pool, they’re depleting access to affordable homeownership, putting Millennials even further from possible homeownership in many cases. 

Trending: Will the surge continue or decline on real estate prices? People are finding out about risk-free real estate investing that lets you cash out whenever you want.

Investors are still buying faster than they’re selling, with roughly 8,000 new properties purchased in March 2024 alone. 

Don’t believe us? Investors could purchase a three-bedroom, two-bathroom home in the top five cities for under $200,000. One is for sale in Springfield, MO, for $189,900. Choosing a four-bedroom, two-bathroom home in Memphis, TN, for just $144,900 makes spending many times that seem crazy. 

The top five cities for investors in the first quarter of 2024 were Savannah, GA (up 8.3%), Youngstown-Warren-Boardman, OH-PA (up 7.9%), Peoria, IL (up 7.2%), Springfield, MA (up 6.4%), and Montgomery, AL (up 6.3%). While these areas have seen significant price growth since 2019, they still fall below the national median, increasing investor appeal.

Here’s a summary of the top five markets by investor share:

Metropolitan area	Median home price	Investor share of the market
Springfield, MO	$247,028	20.5%
Kansas City, MO	$287,115	20.1%
St. Louis, MO	$203,667	18.9%
Birmingham, AL	$225,833	18.7%
Memphis, TM	$223,135	18.2%

The only good news for would-be new homebuyers or first-time investors? Most small investors leverage debt to make purchases, and you could, too. You’re not competing against all-cash buyers. But with these markets growing, you’ll want to get in fast. Find the best mortgage lenders for first-time homebuyers to guide you through the process, or even find interest-only lenders while you get your home or rental ready! 

Read Next:

• This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, and you only need $100.
• Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here’s how you can earn passive income with just $100.