Redfin: Investor Home Purchases at Lowest Level Since Pandemic

(Image courtesy of Nikolaeva Nastia/pexels.com)

Redfin, Seattle, reported U.S. investor home purchases fell 6% year-over-year in Q1 to 45,397, marking the lowest level since 2020.

Investors purchased 19% of homes, also down slightly from 20% in Q1 2025.  

Investor purchases of condos fell significantly year-over-year, by 8%. That’s the lowest first-quarter demand since 2015. Purchases of single-family homes were down 6% and purchases of townhouses fell 13%.

Redfin pointed to a number of reasons for the overall investor downturn. For one, elevated housing costs are squeezing potential returns. However, home-price growth has also slowed, and in some markets, prices are falling. Investors may have less confidence in what they’ll be able to make back, and many rental markets are cooling.

The median capital gain for a home sold by an investor in Q1 was $196,618, up 5.3% year-over-year, but well below the double-digit gains notched in 2020 and 2021.  

General economic uncertainty is weighing heavily as well, ranging from geopolitical issues associated with the Iran war to inflation. And, finally, investor activity may just be normalizing after the pandemic homebuying frenzy.

In addition, investors have a smaller share of home listings than in the recent past, with just 7.8% of all home listings in Q1.

Generally, investors are favoring high-end homes, with purchases of low-priced homes falling 10% year-over-year to their lowest first-quarter level in a decade. Purchases of mid-priced homes fell 6% year-over-year and high-priced homes fell only 1%.

By location, Detroit saw the biggest decrease in investor purchases year-over-year, at 35%, followed by Orlando, with a drop of 25%, and Cleveland, with a drop of 21%. Investor purchases rose by 19% in San Francisco year-over-year, followed by Virginia Beach, Va., at 15%, and San Jose, Calif., at 12%.