Investor home purchases fall to lowest Q2 level since 2020

Real estate investors are losing their appetite for U.S. homes. 

Investor purchases dropped 6 percent year-over-year in the second quarter, the steepest fall since late 2023 and the weakest spring showing since the early pandemic, according to Redfin.

The pullback, however, doesn’t reflect a mass investor exit. Investors still scooped up about 52,000 homes nationwide — nearly one in five sales — a market share flat from last year. Instead, the dip tracks the broader slowdown in housing demand as high interest rates, elevated prices and cooling rents squeeze returns.

Condos are bearing the brunt. Investor purchases sank 13 percent; only 9,500 units trading hands, the lowest second-quarter tally since 2013, excluding the pandemic freeze. 

The numbers underscore why condos are becoming an increasingly risky play: rising HOA fees, special assessments, insurance hurdles and fears of further price erosion.

“The condo market is the slowest I’ve seen in at least a decade,” said Fort Lauderdale-based Redfin agent John Tomlinson, noting buyers are bailing on deals over mounting costs.

Even in single-family and townhouse segments, where investor buys slipped just 4 percent, profits aren’t what they used to be. The typical investor pocketed $196,000 in capital gains on resales last quarter, a mere 1.7 percent bump from a year earlier. That’s a far cry from the pandemic-era frenzy, when year-over-year profits topped 30 percent. 

Losses are also creeping in: nearly 7 percent of investor resales came in below purchase price, up from 5 percent a year ago.

Geography tells its own story. Florida metros led the retreat, with Orlando investor purchases down 25 percent and Fort Lauderdale down 21 percent. Miami, Tampa, West Palm Beach and Jacksonville also saw double-digit drops, as high insurance premiums and hurricane risk make underwriting tougher. 

By contrast, West Coast markets perked up. Seattle investor buys surged 51 percent, and San Francisco and Portland also posted gains.

The mixed picture leaves investors more selective but hardly sidelined. With sellers outnumbering buyers, some are negotiating discounts and concessions. Still, as Redfin economist Sheharyar Bokhari put it, “the numbers just don’t pencil out the way they did a few years ago.”