This spring was dubbed the “worst home-selling season” in 13 years, with fewer contracts signed in April through June than any other period since 2012, according to Redfin. All for good reason: The median home price is at a record high, while interest rates remain stubbornly above 6%.
This one-two punch to affordability has pushed many once-hopeful homebuyers to the sidelines. But there’s one group who’s stepping into the ring: real estate investors.
So far in 2025, real estate investors have snapped up 30% of all existing and newly built single-family homes—the highest share on record, according to property analytics firm Cotality. Small investors made up 25% of these purchases, compared to just 5% of large investors.
Why, in this dud of a market, are small investors gaining an edge?
“While many homebuyers are sidelined by affordability challenges, this market has been a huge opportunity for small investors because competition is lower,” says Austin Glanzer of 717HomeBuyers.com. “This has allowed me to negotiate better deals.”
“Investors thrive on friction, and right now there is plenty of it in the market,” agrees Jacob Naig of WeBuyHousesinDesMoines.com. “High interest rates [created] a vacuum that small, local investors are perfectly positioned to fill. We are not running numbers based on 30-year rates, but on cash flow, cost to rehab, and a hold strategy.”
Meanwhile, “Big institutional buyers are largely on the sidelines [because] they can’t switch on a dime,” Naig adds. “Small investors can be hyperlocal, nimble, negotiate seller concessions, and focus capital deployments on off-market or lightly distressed homes.”
“Even though it’s been a tough market for the average buyer, it’s been full of opportunities for investors if they can move fast,” agrees Ron Myers at RonBuysFloridaHomes. “Traditional buyers are sitting on the sidelines, especially when homes need repairs. That’s where we step in and help solve problems.”
A buyer-friendly fall
The US is also shifting to more of a buyer’s market, which will grow even more favorable come fall as home sellers who’ve missed the spring/summer window get desperate.
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“The reason investors are dominating is because many sellers who are listing right now tend to be in distress,” says Steve Keighery of Home Buyer Louisiana. “Those aren’t properties that retail buyers are eager to take on. That’s where investors step in.”
Naig, for instance, just bought a duplex for 80% of the after-repair value from an owner who couldn’t get it sold in the spring. Into the fall, Naig anticipates, “days on market will increase just enough for direct-to-seller methods to become effective. We’re doubling down on targeted mail and agent referral outreach for distressed properties. And instead of trying to get cash-only low offers, we are getting creative with seller financing, ‘subject to’ deals, and extended closings to give sellers options without sacrificing our money.”
Another upside for investors is that since high mortgage rates have convinced many homebuyers to stick to renting for now, investors who are snapping up properties and turning them into rentals are perfectly positioned to house the very people who’ve put homebuying on hold. As Andrew Fortune at Great Colorado Homes explains, “In Colorado Springs, because families are hesitant to buy, investors are scooping up single-family homes and holding them for steady rental income.”
This is not to say that the emerging buyer’s market does not present challenges for investors, too.
“Even though it’s a buyer’s market, as an investor, you’re both the buyer and the seller,” says Lisa Martinez of TXCashHomeBuyers. “That means we need to add an extra margin from the start to help cover longer hold times and possible price drops. We’re still active, but the key is making sure every deal has room to breathe on both sides of the transaction.”