Investors continued to exert outsized influence on local housing markets in the second quarter of 2025, paying substantial premiums in many areas and increasing their share of home purchases as traditional buyers retreated amid affordability strains. Realtor.com’s Investor Report Mid‑year Update, released via PR Newswire, finds investor activity is highest in a cluster of Sun Belt and Midwestern metros and that in some markets investors paid up to 35% above the median sales price.

The national pattern is clear: investors are both chasing high-value properties in priciest markets and exploiting relative affordability in lower-cost regions. In Q2, Memphis led the list with investors accounting for 25.2% of purchases, up 4.7 percentage points year over year. St. Louis registered a 20.6% investor share (up 1.1 points), Kansas City 19.3% (up 1.7), and San Antonio 18.0% (up 3.7). Other notable metro readings included Birmingham at 17.6% (up 1.1), Las Vegas at 16.8% (up 3.9), Columbus at 16.4% (up 6.0) and Dallas-Fort Worth at 16.1% (up 2.4). Oklahoma City bucked the trend with a 15.5% investor share and a 3.2 percentage point decline year over year.

These transactions carry two distinct market effects. Where investors concentrate in higher-cost neighborhoods, their willingness to pay well above median prices helps lift comparable sales and compresses the pool of attainable homes for first-time buyers. Where they focus on lower-priced metros, bulk and cash purchases accelerate house-price growth in markets that historically offered affordability to local households. The report’s finding that some investor deals exceeded median prices by as much as 35% underscores how investment demand can outbid typical household buyers, especially where inventory is thin.

The immediate consequences are familiar to market-watchers: fewer listings available to owner-occupants, intensified competition for entry-level homes and potential upward pressure on rents as investors convert acquisitions to rentals. For prospective homeowners already contending with elevated borrowing costs and stretched budgets, a larger share of sales going to investors effectively raises the bar for attaining homeownership.

Policy responses at local and state levels are likely to return to the fore. Options discussed by housing officials and advocates—ranging from taxes on speculative or absentee ownership to incentives for owner-occupant purchases and accelerated supply-side measures—aim to rebalance opportunities. Economists stress that durable relief will hinge on expanding supply and restoring a healthier distribution of entry-level listings rather than solely curbing investor demand.

Over the longer term, sustained investor appetite could reshape ownership patterns and neighborhood tenure if the trend persists, with implications for wealth accumulation among households and for rental market dynamics. How much pressure investors continue to apply will depend on mortgage-rate trajectories, inventory growth and whether policymakers pursue measures to preserve pathways to homeownership for everyday buyers.