Small investors are making up a larger share of home purchases this year and signs of a more balanced market could mean an opening for the average consumer.
"So that inventory over the last three and a half years has jumped up into now we have real inventory," said Jeff Lichtenstein, owner of Echo Fine Properties in South Florida. "So you have a lot of people right now who are selling — whether it's land or homes — who are willing to deal."
While inventory is rising, home prices and mortgage rates remain high, keeping many prospective first-time buyers on the sidelines.
"All you can do is save, save, save, and even then it might not be enough," one prospective home buyer said.
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A report from Cotality, a firm that tracks property information and analytics, shows investors are playing a larger role. In January, investors accounted for 32% of single-family home purchases nationwide. By June, that number dropped to 29% — still a record high.
Small investors, defined as those owning fewer than 10 properties, make up the largest share at 14% of purchases. Medium-sized investors, with fewer than 100 properties, account for 10%.
"The reason that the small investors are thriving is that they're more agile in this market and they don't need to make as big of a profit center as some of the larger ones," Lichtenstein said.
Large and mega investors collectively account for 5% of activity, according to Cotality data.
"Some of the larger builders, larger investors want to get a certain return for their money," Lichtenstein said. "Or they may have problems with crews because of the deportations and some that going on."
He noted the market is seeing an increase in "must-sell" situations, when homeowners need to sell for financial or personal reasons. Still, average consumers may not need to wait for interest rates to drop.
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"When your interest rates are where they are right now, it gives the buyer a lot more bargaining power when they are going in and making an offer," said Forrest Hewes, branch manager at Community Mortgage Advisors.
Experts told Scripps News the changes could point toward a more balanced housing market in the near future.
"I think we'll have a good 2026 because of all these factors coming into play," Lichtenstein said.
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