Investors Paying Up to 35% Above Median Home Price

 

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Investors paid as much as 35% above the median sales price in some U.S. states during the second quarter of 2025, according to Realtor.com’s Investor Report Mid-Year Update. 

While overall home sales fell 4.2% year over year, investor purchases dropped only 2.7%, giving them a stronger foothold in a shrinking market. 

With affordability stretched and inventory still tight, investors are shaping home prices from both ends of the spectrum, paying premiums in high-demand metros and scooping up bargains in affordable regions.

Their overall share of purchases rose slightly to 10.8% of all homebuyers, up from 10.7% a year ago and just below the 2022 peak of 12.1%.

In the first half of 2025, investors also bought about 41,000 more homes than they sold, further limiting supply and intensifying competition. 

Where Investors Are Paying Premiums

Investor premiums are most concentrated in Western and coastal states, where affordability challenges and limited supply have already pushed prices to new highs. In these areas, investor activity often centers around luxury listings, short-term rentals (STRs), or high-end flips.

The top five states where investors paid above the median price were:

  1. Montana: 35.1% higher than the median, with investor purchases averaging $574,000 compared to $425,000 overall
  2. Utah: 33.7% higher ($667,000 vs. $499,000)
  3. California: 23.3% higher ($909,000 vs. $737,000)
  4. New York: 12.3% higher ($554,000 vs. $493,000)
  5. Vermont: 3.2% higher ($382,000 vs. $370,000) 

Among large metros, the biggest premiums were found in:

  • Los Angeles (+19.8%)
  • San Diego (+9.2%)
  • New York City (+8.7%)
  • San Francisco (+6.8%)
  • Nashville (+3.4%)

These premiums are partly driven by investor strategies targeting luxury markets and short-term rentals. Limited inventory and persistent demand in cities like Los Angeles and New York amplify the effect.

Realtor.com Chief Economist Danielle Hale says the imbalance between investors and traditional buyers is being shaped by today’s affordability gap.

“Even as investors pull back from pandemic-era activity, they’re facing fewer headwinds than many typical buyers. With affordability still stretched and inventory tight, many would-be buyers remain sidelined, giving investors a larger share of the market and, in some areas, more influence over prices.”

Where Investors Are Buying at a Discount

On the opposite end of the spectrum, investors are finding deals in the Midwest and Mid-Atlantic, often focusing on entry-level homes with the best rent-to-price ratios.

The top five states where investors paid below the median purchase amount were:

  1. Michigan: 53.1% below the median ($118,000 vs. $252,000)
  2. Maryland: 45.4% below ($231,000 vs. $424,000)
  3. Virginia: 45.0% below ($230,000 vs. $418,000)
  4. Delaware: 41.4% below ($238,000 vs. $407,000)
  5. Wisconsin: 40.7% below ($175,000 vs. $296,000)

The steepest metro-level discounts were seen in:

  • Detroit (-58.0%)
  • Pittsburgh (-52.7%)
  • Baltimore (-52.0%)
  • Cleveland (-51.4%)
  • Milwaukee (-50.1%)

These are stable rental markets where investors can renovate or rent out properties for long-term income. The discount strategy reflects confidence in rental yield and future appreciation rather than quick resale profits.

Where Investor Share Is Highest

Investor concentration remains strongest in affordable, high-demand regions where prices and rent potential align. The states with the largest investor share of home purchases were:

  • Missouri (18.9%)
  • Mississippi (17.1%)
  • Nevada (15.4%)
  • Indiana (14.3%)
  • Alabama (14.2%)

Among the 50 largest U.S. metros, investor share was highest in:

  1. Memphis, TN-MS-AR: 25.2% (+4.7% year over year)
  2. St. Louis, MO-IL: 20.6% (+1.1%)
  3. Kansas City, MO-KS: 19.3% (+1.7%)
  4. San Antonio-New Braunfels, TX: 18.0% (+3.7%)
  5. Birmingham, AL: 17.6% (+1.1%)
  6. Las Vegas-Henderson-North Las Vegas, NV: 16.8% (+3.9%)
  7. Columbus, OH: 16.4% (+6.0%)
  8. Dallas-Fort Worth-Arlington, TX: 16.1% (+2.4%)
  9. Oklahoma City, OK: 15.5% (-3.2%)
  10. Indianapolis-Carmel-Greenwood, IN: 15.1% (+1.1%)

Realtor.com Senior Economic Research Analyst Hannah Jones says the data reflects a split in investor strategy across the country.

“Some investors are doubling down on affordability and rental yield, while others are willing to pay a premium for markets with persistent housing shortages and strong rental demand. Both approaches reflect confidence that housing demand, and rent potential, will remain strong over time.”

Investor activity, in other words, is adapting to a bifurcated market, one where cash-heavy buyers can dominate either end of the price spectrum, leaving fewer opportunities for traditional buyers to compete.

Key Details: 

  • Realtor.com’s Investor Report shows investors paid up to 35% above median home prices in Montana, Utah, and California, while discounts in Michigan and Maryland topped 50% below. 
  • Investor market share rose to 10.8%, with buyers purchasing 41,000 more homes than they sold in early 2025, tightening inventory and heightening competition across U.S. housing markets.

Sarah Lentz | Nov 6, 2025 | Housing Market

https://nowbam.com/investors-paying-up-to-35-above-median-home-price/

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