Across the country, investors are shaping local housing trends differently depending on market affordability. In expensive states – like California, Montana and Utah – investors are paying up to 35% above market price. In more affordable states like Michigan, Maryland and Virginia, they are targeting discounted homes, sometimes 50% below market value, according to the Investor Report Mid-year Update by Realtor.com.
Danielle Hale, chief economist at Realtor.com®, said in the report that although investors are purchasing fewer homes than during the pandemic, they still hold an advantage over typical buyers because they often have more cash or easier access to financing.
Download the SAN app today to stay up-to-date with Unbiased. Straight Facts™.
Point phone camera here
Many regular buyers can’t compete and are staying out of the market because the few available homes are often more expensive. That leaves investors with a bigger share of the market, giving them more influence over home prices. In areas where investors focus on the same types of affordable or mid-priced homes, their buying activity can push prices up further.
Investors are paying premium prices to secure properties in expensive, in-demand markets, usually for profit. For example, investors’ median purchase prices were 35% higher than Montana’s typical sale price. Similar trends appear in Utah, California, New York and Vermont, according to Realtor.com.
In more affordable states, investors are buying cheaper homes than the average buyer to generate rental profits over time. In Michigan, the median price investors paid was 53% lower than the state’s typical sale price, with similar discounts in Maryland, Virginia, Delaware and Wisconsin.
Investor activity tightens supply
Investors are holding onto more homes and buying more than they’re selling. By mid-2025, investors accounted for a little over 10% of all home purchases, slightly higher than last year but still below the 2022 peak. In 2024, investors were selling more homes, which temporarily reduced competition for regular buyers.
First-time buyers face mounting challenges
At the same time, according to a national survey by the National Association of Realtors (NAR), fewer people are buying their first home than ever before. Between July 2024 and June 2025, only 21% of home purchases were made by first-time buyers. Plus, the median age of first-time buyers has risen to 40, the highest on record.
According to NAR, in the 1980s, most first-time buyers were in their late 20s; however, today they’re much older. Those trying to buy a home now say high rent and student loan debt make it difficult to save for a down payment.
Among the relatively few first-time buyers who can afford to buy, most rely on their own savings (59%) or investments (26%) rather than help from family or friends. In the past, gifts or loans from relatives were more common sources of down payment funds.
“The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory,” Jessica Lautz, NAR deputy chief economist and vice president of research, said. “The share of first-time buyers in the market has contracted by 50% since 2007 – right before the Great Recession. The implications for the housing market are staggering. Today’s first-time buyers are building less housing wealth and will likely have fewer moves over a lifetime as a result.”
