Investor home purchase activity falls by over 20% in 1Q

Investor real estate purchases declined by over 20% in the first quarter, both from three months and one year prior, but still made up nearly one-third of all home sales during the period, the latest BatchData Investor Pulse Report found.

The drop comes as the U.S. government was working to, and looks like it finally succeeded, put limitations on the investor purchase business as part of a housing bill.

During the period, those with no intention to occupy the property bought over 236,000 homes, a nine-quarter low, the report said. This compared with 309,000 in the fourth quarter, a 23.6% decline, and 306,000, a drop of 22.9%, for the first quarter of 2025.

"While the headline number of investor home purchases remains unusually high, the actual number of properties investors are buying has now decreased significantly for the second consecutive quarter," said BatchData president Ivo Draginov in a press release. "First quarter home sales were down year-over-year, due partly to severe weather in the Northeast and Midwest, and partly due to mortgage rates that rose as the market reacted to the war in Iran."

The share remained elevated because overall sales declined, Draginov continued.

The report was done prior to news of a compromise federal housing bill broke.

In March, the U.S. Senate, in a bi-partisan 89-10 vote, approved a housing bill which, if the House of Representatives had passed it, would put into law Pres. Trump's executive order on investor purchases. It also included a seven-year limit on institutional ownership of build-to-rent housing.

But the House put its own spin on the institutional investor restrictions, resulting in the compromise legislation passed on Tuesday which keeps the institutional investor restrictions in place, but dropped the BTR sales requirement.

The BatchData report, which also uses other sources aggregated by CJ Patrick, a business intelligence company, stated 92% of the investor properties are owned by people with between one and five homes. Just 2.18% are owned by entities holding a title on over 1,000 homes.

Overall, 18% of residential properties are owned by investors, the report said.

Investors purchased homes in the first quarter at an average of $431,282, but sold them at $391,491, which BatchData said was below the $514,500 average for all home sales.

The 32% share of non-owner occupant purchases is consistent with the prior period. But it was still the fourth consecutive quarter where these sales made up more than 30% of the market.

Those large investors bought 10% fewer homes in the first quarter, 4,298, versus 4,763 in the fourth quarter. In the first quarter of 2025, this portion of the market bought 5,167 homes.

At the same time, first quarter sales from those who owned over 1,000 properties totaled 5,949. This compared with 6,533 units in the fourth quarter and 6,359 units one year ago.