The Rise of the Small Investor: A Window in Today’s Housing Market
- Kim Clark, AE, GAD
- 11 hours ago
- 2 min read
It’s no secret the housing market has been tough lately—especially for traditional homebuyers. With mortgage rates still hovering at uncomfortable highs and home prices refusing to budge, many would-be buyers are sitting on the sidelines. But while first-time buyers struggle, a different group is stepping in to fill the gap: investors.
What’s surprising is who these investors really are.
Contrary to popular belief, it's not just Wall Street swooping in to grab up properties. In fact, the overwhelming majority of investor-owned single-family homes—around 85%—are held by mom-and-pop investors who own just one to five properties. That means regular people, often using equity from a previous home or paying cash, are becoming the quiet force shaping today’s real estate market.
In the first quarter of 2025 alone, nearly 27% of all homes sold in the U.S. went to investors—a sharp jump from the pre-pandemic average of around 18.5%. And yet, total home sales only ticked up about 1.2% year-over-year. So what gives?
Here’s what’s happening: as traditional buyers pull back due to affordability pressures, investors are snapping up a bigger slice of the market. Many are using cash or leveraging home equity to get deals done quickly—giving them a distinct advantage in today’s environment, where financing delays and rate hesitations can derail offers.
For mom-and-pop investors, this shift presents a real opportunity.
As more homes sit longer on the market and institutional investors scale back their activity, smaller investors are finding less competition and more room to negotiate. They’re also benefiting from strong rental demand, as priced-out buyers turn to leasing—often bringing solid credit and a need for long-term housing stability.
It’s a chance to grow a rental portfolio, build equity, and meet community needs—all while operating on a manageable scale. The key is knowing your market, running the numbers carefully, and having a plan for the ups and downs of property ownership.
Of course, investing comes with risks—especially if you're leveraging equity or going all-in with cash. Market dynamics are shifting quickly, and prices could soften further in some areas. That means small investors need to stay nimble and think long-term.
Still, in a market where so many are standing still, those who move strategically may find themselves in a powerful position. For local investors looking to expand, or for first-timers thinking about jumping in, the current moment offers something rare: a wide-open lane to build wealth and strengthen community housing—without going head-to-head with the big players.
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