Real Estate & Mortgagesbreaking news
Why investors keep buying homes while rents fall for 38 straight months
Rents are down, mortgage rates sit in the mid-7% range and carrying costs are up, so the investors still buying have changed how they shop.
This article is general information, not financial, investment or insurance advice. Check the details with a qualified adviser before you decide.
Rents fall as costs rise
Rents have fallen year over year for 38 straight months, which squeezes anyone who owns a rental property or plans to buy one. [1] Mortgage rates are hovering in the mid-7% range at the same time. [1]
Investors purchased 7% fewer homes than a year earlier, according to the latest Realtor.com Investor Report. [1] The median list price was down 1.4% compared to a year earlier, according to Realtor.com. [1]
Investors still buy more than in 2017 to 2019
In the first half of 2026, overall home sales were 19.4% and non-investor purchases were 21.6% below their 2017 to 2019 average. [1] Investor purchases were 4.2% above that average. [1]
Large and mega-investors became net sellers in the first half of 2026. [1] Small investors accounted for 66.2% of investor purchases in that period, the highest share in at least 15 years. [1]
Cheaper homes and more cash
The typical non-investor paid $380,000 for a home in the first half of 2026. [1] Small investors paid a median of $295,000, which is 22.4% less than the typical non-investor. [1]
The 10 most investor-heavy large metros had a median investor purchase price of roughly $174,000 in the first half of 2026, compared with $295,000 nationally. [1]
About 55.5% of investor purchases were made in cash in that period, compared with 30% across the overall market. [1] Mega-investors paid cash 80.4% of the time, compared with 56.1% for small investors. [1]
The costs of holding a rental
Property taxes rose 31% between 2019 and 2025, according to Harvard University's Joint Center for Housing Studies. [1] Average monthly homeowners insurance premiums jumped 72%, according to the same source. [1]
A landlord or rental-dwelling insurance policy generally costs about 25% more than a standard homeowners policy, according to the Insurance Information Institute. [1] Investment-property mortgage rates are typically 0.5 to 1 percentage point higher than rates for primary residences, according to LendingTree. [1]
What this means if you are considering a rental
Kastanis said investors have to be much more disciplined today. [1] Kastanis said the market does not make real estate a bad investment, but investors have to be more selective. [1]
Kastanis said one of the biggest advantages an investor has right now is the ability to negotiate. [1] Kastanis warned that the mistake is stretching finances on the assumption that rents will keep rising or that a lower refinance rate will come soon. [1]
Sources
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