Flippers and mega-investors have left the market, but small investors are showing resilience
The high U.S. home investor share seen over the past two years nudged up in the third quarter, despite 2023’s mortgage rate increases. In July, August and September, the share of single-family purchases made by investors was 26.8%, 27.2% and 28%, respectively. Given this trend, it would not be surprising to see these numbers climb above 30% in the fourth quarter of 2023.
Figure 1 shows the share of home purchases made by investors since January 2019. In 2019 and 2020, investor activity never moved above 20%. But in 2021, this share leaped, and investors have made roughly one-quarter of all single-family purchases in each year since.
Though increased investor activity began in a low-interest rate environment, it has persisted through mortgage rate increases and shows no signs of dropping back below 20% soon [1]. Many owner-occupied buyers typically reduce activity in the last quarter of the year, making a seasonal bump in investor purchases quite possible.
Share and Number of Home Purchases Made by Investors Since 2019

The investor share is a measure of purchases relative to owner-occupied activity. Examining the number of transactions instead gives an absolute measure of activity and shows that it would be more accurate to characterize the current level of investor activity as only relatively high.
Figure 2 illustrates the number of U.S. home purchases made by both investors and non-investors through September 2023. Investors made a respective 95,000 and 105,000 purchases in July and August before pulling back to 84,000 in September. These numbers are well below the level of investor purchases at the same time in the previous two years, when investors made more than 100,000 buys in each month.
Notable in Figure 2 is the large drop in owner-occupied purchases in September, down from 280,000 to 215,000. This may foreshadow how different types of buyers might react to mortgage rates above 7% and shows an early sign that investors may be the more resilient group.

Share and Number of Investor Purchases by Size Since 2019
Smaller investors continue to make up most of that buyer segment. Figure 3 shows that throughout 2023, mega-investors (those that own 1,000 or more properties) and large investors (those that own of 100 to 999 properties) each held market shares of about 10% in the third quarter. The medium investor share (those that own 10 to 99 properties) slid slightly from 36% to 35%, and small investor activity (those that own three to nine properties) held steady at around 45%.

Figure 4 shows purchase numbers for all investor tiers. Throughout the third quarter of 2023, large and mega-investors purchased between 8,000 and 10,000 single-family homes per month, about 1,000 more transactions per month than in 2019. For mega-investors, this is also well-below 2021 and 2022 levels of 20,000 or more per month.
Despite the overall investor share remaining very high, the mega-investor surge appears to be winding down. Small investors are showing more resilience to tough market conditions, making around 5,000 more purchases per month than they did in the third quarter of 2019.

Home-Flipping and iBuyer Activity Since 2019
Home-flipping activity remained muted in the first few months of 2023. Figure 5 shows the share of homes purchased by investors who resold properties within six months through March 2023. Only 13% of investors who purchased a home in March 2023 resold by the end of September. This is lower than the rates recorded in the last four years in the month of March: 2019 (15%), 2020 (17%), 2021 (17%) and 2022 (17%).
However, given the return of positive home price appreciation, it is possible that flipping activity might regain steam in the next few months. That said, higher interest rates can deter flippers, given that investors will have to make larger monthly payments.

The mass exit of mega-investors in the market is clear in the decline of iBuyer purchases. Figure 6 shows iBuyer market activity through September 2023. Throughout the first half or 2023, iBuyers never accounted for more than 1% of purchases at any point and in September still just accounted for about less than 2% of all investor purchases. There was something of an uptick in iBuyer activity in Q3 2023, but they still only made just over 1,000 purchases in September, down by more than 80% from two years earlier.

California and Texas Are the Most Popular States for Home Investors
California and Texas are the most popular states for investors: Figure 7 shows that 13 of the top 20 U.S. metropolitan statistical areas (MSAs) are in either state. San Jose, California has the highest share at 46%, followed by Los Angeles at 41%; McAllen, Texas at 41%; and El Paso, Texas at 38%. McAllen and El Paso are notably lacking in mega-investor presence.
Atlanta has the highest investor share for an MSA outside of California and Texas at 37%, which is driven by exceptional mega-investor activity. Atlanta is the only MSA where mega-investors made more than 10% of purchases in the third quarter. In fact, Atlanta’s mega-investor share (13.7%) is so high that if small, medium and large investors were excluded, that metro would fall from No. 5 to No. 74 in total investor share.

Though the share of investors is slowly moving up, the market has cooled for such homebuyers. Flippers are buying at rates that are well below their pre-pandemic levels, and large/mega-investors have stopped their spending sprees. The small-investor share is now helping support this section of the housing market.
The low mortgage rates seen between 2020 and 2022 could be propping up small home investors. Those rates allowed many existing homeowners to refinance their mortgage to more favorable terms, increasing the chances that they rent out their existing home when they move rather than sell. This trend is happening in the context of rising mortgage rates and prices, both of which are pushing potential first-time homebuyers who are unable to afford a down payment back to the rental market.
CoreLogic’s Office of the Chief Economist offers the latest data, insights and commentary on U.S. housing market trends, which are updated frequently and available here.
[1] Using CoreLogic’s public-records data, an investor is defined as an entity (individual or corporate) that has retained three or more properties simultaneously within the past 10 years.