In These 3 States, More Than 15% of Homes Are Being Bought as Investment Properties

• Investors accounted for at least 15% of home sales in these three states in the second quarter: Missouri (18.9%), Mississippi (17.1%), and Nevada (15.4%).

• Nevada’s share of investor purchases rose the most from the second quarter of last year (3.8%).

• Investors typically paid below the state median price in states like Michigan, Maryland, and Virginia, and above the median price in Montana, Utah, and California.

Investors are buying homes at the highest rate of total home sales in Missouri, Mississippi, and Nevada, according to an analysis of second-quarter home sales by Realtor.com.

Nationally, about 10.8% of homes sold in the quarter were bought by investors, up 0.1% from the second quarter of 2024, although Realtor.com noted that the numbers for sales overall and homes purchased by investors declined year-over-year.

Investors sold 4% fewer homes in the quarter but made up the same share of home sellers as the broader housing market slowed amid persistently high mortgage rates and inflation.

In these three states, investors accounted for more than 15% of homebuyers, according to Realtor.com’s research:

• Missouri (18.9%)

• Mississippi (17.1%)

• Nevada (15.4%)

Other states with significant investor buying activity included the following:

• Indiana (14.3%)

• Alabama (14.2%)

• Utah (14.1%)

• Oklahoma (13.5%)

• Texas (13.4%)

• Kansas (13.3%)

• Hawaii (13.2%)

Hawaii and Oklahoma’s share of investor activity was down, respectively, 1% and 1.6%, Utah’s was almost flat at negative 0.1%, and the rest of the group increased year-over-year.

Nevada had the largest year-over-year pickup in investor activity with 3.8% growth. Realtor.com said a slowdown in demand around Las Vegas has dragged home prices down, leading investors to flock to the area.

When investors move in, competition heats up—and that affects everyone. If you’re buying, a surge in investor activity can mean tougher bidding wars and fewer affordable listings. If you’re selling, it may work in your favor, since investor demand can drive up prices and shorten the amount of time your house is on the market. Knowing where investors are most active can help you better time any move and price your home more strategically.

In some states, the average investor purchase is much lower than the median home sale price, both in that state and the U.S. overall. Michigan was the cheapest state for investors to buy in the quarter, with a median investor purchase price of $118,000, which is less than half the median price across the state of $252,000.

Investors were also seeking to capitalize on value by buying homes at below-average prices in Maryland, Virginia, Delaware, and Wisconsin. In these states, the median investment purchase price was between 40.7% and 45.4% lower than the median price of homes statewide.

Realtor.com said these gaps suggest those states are seeing increased competition between homebuyers and investors for entry-level homes, along with investors looking to take advantage of locations where they see value in owning rentals.

Meanwhile, investors were most willing to pay well above the median home sale price in areas with growing luxury demand, like Montana and Utah, which were 35.1% and 33.7%, respectively, above the median price. Investors also paid a premium of 12.3% and 23.3%, respectively, for properties in New York and California.

Small investors made up more than 60% of investment-home purchases last quarter, far outpacing large institutional buyers, who accounted for about 20%, and medium-sized investors at 18%. That means most competition in today’s housing market isn’t coming from big corporations—it’s coming from individuals and small firms looking to rent out or flip properties.

For homebuyers, the competition can be intense. Fewer listings and strong investor interest can drive up prices and make entry-level homes harder to find, especially in hot markets like Memphis, St. Louis, Kansas City, and San Antonio, where investors made up at least 18% of buyers. In Memphis alone, one in four homes sold went to an investor.

Read the original article on Investopedia