Investors Ease Up on Housing Market in Q4: Redfin

Investor purchases fell 3.9 percent year-over-year in the fourth quarter, according to a Redfin analysis. This marks the largest annual decline in a year, as investors bought just over 47,000 homes, the lowest fourth-quarter level since 2016.

The decline was particularly pronounced in Florida, where investor purchases plunged 27.5 percent in Orlando, 21.3 percent in Miami and 14.5 percent in West Palm Beach. Chicago and Atlanta also saw significant drops at 23.3 percent and 18.4 percent, respectively.

Investors’ market share also diminished, as it accounted for 17.1 percent of all home purchases in Q4, down from 19 percent a year earlier; it was the lowest fourth quarter share since 2020. This suggests investors are retreating from the market faster than typical homebuyers.

Several factors are driving this investor pullback: a slowing housing market with high prices and mortgage rates, lackluster homebuying demand and plateauing rents, economic uncertainty surrounding inflation, tariffs and the new presidential administration, as well as elevated interest rates making financing more expensive.

The condominium market has been hit hardest: investor purchases of condos dropped 13 percent year-over-year to the lowest fourth-quarter level since 2012. This decline is again particularly evident in Florida, where purchases fell nearly 30 percent in Orlando, 26.1 percent in Tampa and 22.9 percent in Miami. Rising HOA fees and insurance costs due to worsening natural disasters have made condos less attractive investments.

By contrast, the Bay Area is seeing renewed investor interest. Seattle led with a 33.8 percent increase in investor purchases, followed by San Jose (21.1 percent), Oakland (19.4 percent) and San Francisco (19.1 percent).

While investors have reduced purchases across most property types, activity in low-priced homes has remained relatively stable. Investors bought essentially the same number of low-priced homes as a year earlier, while purchases of high-priced and mid-priced homes fell by 3.5 percent and 11.2 percent, respectively.

Despite the overall decline in purchases, the total value of investor acquisitions increased 6.3 percent year-over-year to $36.5 billion, matching the rise in home sale prices during the same period.

Redfin defines investors as any institution or business purchasing residential real estate, including both institutional and mom-and-pop investors, based on county-level home purchase records across 39 major metropolitan areas.