Where Investors Are Buying Homes in 2025

Investor activity is reshaping the U.S. housing market in 2025.

With mortgage rates still hovering near 7 percent, many traditional buyers have stepped back. In their place, investors — both domestic and international — are filling the gap, keeping liquidity flowing and stabilizing prices in select regions.

The Investor Surge Filling the Gap

High rates have slowed owner-occupant demand, but investors are stepping in to keep the market moving.

According to an August 2025 report, investors purchase nearly 30% of all single-family homes. Many of those deals are cash, giving sellers speed and certainty while cutting out lender risk.

Most investor purchases still fall below the national median home price, signaling a focus on mid-tier or value-add properties. This wave of buying has kept many regional markets stable, preventing steeper declines that rising rates might have otherwise triggered.

States Attracting the Most Investor Capital

A handful of states are far outpacing the national average for investor ownership. While U.S. investor share hovers around 20 percent, several markets have crossed the 30 percent mark.

(Source: Realtor.com)

Why these markets lead:

• Maine & Montana: “Live-where-you-vacation” economies with affordable pricing and cap rates above 8 percent.

• Hawaii: Rental yields between 8–12 percent, nearly double the U.S. average, even with strict short-term rental rules. 

• Alaska: High-performing seasonal rentals tied to tourism, construction, and energy sectors.

These states are clear outliers and, for investors, that’s precisely what makes them interesting.

The “Affordability Arbitrage” Trend

Many buyers are redirecting capital from expensive coastal metros to lower-cost inland markets -  a move often called affordability arbitrage.

• West Virginia, Mississippi, and Arkansas stand out with typical listings between $150,000 and $180,000 .

• A $500,000 budget in these areas can secure three rental homes instead of one condo in a coastal city.

• Investors are prioritizing predictable cash flow over speculative appreciation.

The shift shows a change in mindset. Instead of chasing rapid appreciation, investors are looking for reliable returns and room to grow. Lower-cost states offer both. They make it possible to build a portfolio and protect themselves from market swings.

Migration and Demographic Hotspots

People are still on the move, and investors are following them. Population growth remains one of the clearest signs of where housing demand is headed next. States gaining new residents tend to see tighter supply, stronger rent growth, and more resilient home values.

• Idaho has one of the highest inbound migration rates in the nation — roughly 70 percent of home-search traffic comes from out of state — and only 0.41 housing units per resident (Real Estate News).

• Vermontis seeing its own steady inflow, fueled by remote professionals and retirees seeking smaller markets with quality rentals and slower lifestyles.

Population shifts like these are shaping investor strategy in real time. As more Americans relocate for affordability, jobs, or quality of life, investors who track migration trends can stay one step ahead — finding markets where demand arrives before competition does.

States With the Lowest Investor Activity

Not every state is seeing a rush of investor money. Some markets remain driven by local homeowners rather than outside capital. These areas tend to have higher home prices, tighter regulations, and buyers who plan to stay long-term instead of rent or flip.

• Minnesota – 9.3 %

• Colorado – 10.1 %

• Connecticut – 10.6 %

In these states, strong local economies, high resident demand, and tighter short-term rental regulations.

Foreign Buyers Re-Entering the Market

After several quiet years, international investors are back. Between April 2024 and March 2025, foreign buyers purchased roughly 78,100 U.S. homes worth $56 billion, a 44 percent annual increase. Nearly half of these deals were all-cash, focusing on luxury and second-home markets such as Miami, Los Angeles, and Scottsdale.

Top destinations:

• Florida (21 %)

• California (15 %)

• Texas (10 %)

• New York (7 %)

• Arizona (5 %)

A few states, including Florida, have placed limits on foreign buyers, yet international money continues to drive high-end housing and affect mid-range markets.

Looking Ahead

Investor activity isn’t just influencing the market — it’s driving it. Smaller buyers now hold most of the momentum, targeting affordable, high-yield areas while larger funds sit on the sidelines. As traditional buyers pause, investors are keeping deals moving and prices steady in key regions.

Heading into 2026, the strategy is clear: follow where people are moving, where homes are still affordable, and where rents can grow. The best markets aren’t always the loudest ones — they’re the ones quietly producing steady cash flow and long-term value.