After a brief slowdown in buying activity earlier this year, institutional investors have ramped up again.
Institutional buyers who own 1,000 or more homes — classified as mega investors — purchased 2.2 percent of single-family homes in August, according to Cotality’s September market analysis. That’s a 0.8 percentage point increase from February, when their purchase share fell to a low of 1.4 percent.
Realtor.com economists said on Monday that investors’ renewed vigor is tied to two factors: mortgage rates and the passage of the 21st Century ROAD to Housing Act.
Individual buyers have been pulling back from the market because of affordability concerns and mortgage rate volatility, the report said, leaving more inventory available to institutional buyers, who often complete all-cash transactions. Then, Congress’s passage of the 21st Century ROAD to Housing Act relieved investor uncertainty, allowing them to adjust their strategies to align with the bill’s provisions.
Hannah Jones
“Investors, especially institutional ones, are less reliant on financing and more often pay in cash, which could nudge the institutional investor share higher as the surrounding market contracts,” Realtor.com senior economist Hannah Jones said. “It’s also possible that institutional activity slowed while policy was unclear and in flux, and that these investors have returned now that it’s settled.”
As for whether this increase signals the beginning of a more significant rebound, Realtor.com said the data is unclear.
Jones acknowledged that the increase could reflect a backlog of deals held until the housing bill passed, or that institutional buyers are seeing their share of purchases rise as individual buyers falter under 7 percent-plus mortgage rates, inflation and other market headwinds.
The answer will become clearer in the coming months, the economist said, with transaction volume being the primary metric to watch.
“[Transaction volume] should show whether institutional activity is truly growing or whether the rest of the market is simply shrinking around them while they continue to compete,” she said.
Even if another institutional investor boom is on the horizon, Realtor.com said it likely won’t look the same as it did in 2021 and 2022.
The past few years have allowed the largest investors to evaluate their portfolios and snap up a mix of multifamily and single-family properties, since the typical American doesn’t make the transition from renter to homeowner until 40. Delayed homeownership, alongside federal legislators’ decision to axe restrictions on build-to-rent communities, means the next wave of investor activity could focus on this segment of the market.
The portal found that build-to-rent communities, also known as BTRs, peaked at 122,000 starts in early 2024. The National Association of Home Builders said starts have since slowed somewhat, declining 16 percent year over year to 15,000 in August.
The National Apartment Association’s (NAA) first quarter BTR analysis said large Sunbelt markets, like Austin, Phoenix, Charlotte and Orlando, are seeing the biggest decline in starts. However, they said the decline in activity shouldn’t be seen as a “withdrawal,” but as a “reallocation,” with locales like North Dallas, Boise, Denver and the Carolina Triangle yielding solid completion rates.
As for where the capital is going, investors are focusing on Long Island, New York, ($190 million); suburban Chicago ($102 million); Charlotte, North Carolina ($41.3 million); Denver ($40.9 million); and Tulsa, Oklahoma ($37.3 million).
BTR occupancy rates have stayed in the 90-percent range, clocking in at 92.6 percent during the second quarter of 2026. “The BTR sector is increasingly functioning not as an alternative housing option but as a core component of housing supply,” NAA said.
Kelli Lawrence, CEO of Indianapolis-based build-to-rent developer Onyx+East, said BTR demand is high, with students, professionals and families all looking for the affordability and flexibility that these communities offer. “The long-term demand and need never went anywhere,” she told the portal. “So it was just a matter of educating lawmakers [about] who we are and what we do.”
