Investors accounted for 27% of U.S. single-family home purchases from March through June 2026, down from 28% at the end of the first quarter, according to a Sept. 3 analysis from Cotality.
The decline follows a typical seasonal pattern, as owner-occupant buyers become more active during the summer months. Investor activity, however, remains above the levels seen during much of the 2010s, when investors generally accounted for less than 20% of single-family purchases.
Investors made about 273,000 purchases in the second quarter, down roughly 40,000 from the same period a year earlier. Mega investors, meaning those owning at least 1,000 properties, accounted for about 10,000 of that decline, Cotality found.
“The investor share dropped in Q2 2026, but that is par for the course in the summer,” said Thom Malone, principal economist at Cotality. “The more compelling story lies in overall volume. Investors executed roughly 40,000 fewer purchases compared to Q2 2025, with mega investors accounting for about 10,000 of that decline. That represents a significant drop given their small market presence, suggesting that proposed restrictions on institutional investors had an immediate chilling effect.”
Malone said that the “true test” will be in Q3 2026 now that the 21st Century Road to Housing Act and its 350-home threshold for institutional owners is officially law.
“We will see whether this was a permanent retreat or just a pause while investors waited for a clear path forward,” he said.
Cotality’s data shows that activity among the largest investors began falling before the law was enacted. Malone said the decline was particularly pronounced in January, when the legislation was introduced.
“There’s a real sharp discontinuity,” Malone said in a conversation with HousingWire. “They go from 2.5% of all purchases down to being 1.3% of all purchases.”
Malone said the size and timing of the decline suggest the legislation, rather than broader market conditions, was a major factor.
“The only real comparable event is back when mega investors dropped like that would be back in 2022, and that was when all the iBuyers left the market,” he said. “So those are the only two times in the data we’ve seen a drop like this.”
Size matters when it comes to declines
Investors owning at least 1,000 properties (mega investors) averaged about 4,500 purchases per month during the first half of 2026, a 40% decline from the first half of 2025.
Investors owning 100 to 999 (large investors) properties reduced their acquisition volume by 21% year over year, while investors owning 10 to 99 properties (medium investors) reduced purchases by 17%. Investors owning three to nine properties (small investors) saw a 3% decline.
The effect on smaller investors could become more significant if large investors remain out of the market, Malone said. Strong rental demand, combined with high home prices and mortgage rates, could create an opportunity for smaller investors to fill some of the gap.
“Assume they do stay out, or even if they do come back into the market, they [won’t] come back in the same amount as they were,” Malone said. “Rental demand is still strong because unaffordability is still very high, with prices being high and rates being high.”
Cotality’s data showed some increase in purchases by small investors as larger investors pulled back, although activity among investors owning three to nine properties has since declined somewhat. Malone said that decline is more consistent with normal seasonal patterns.
Third quarter will tell us more
The third quarter could provide an early indication of whether large investors intend to return to the single-family market.
“My guess would be they will rise back up, but not to the extent that they were,” Malone said.
Malone also said some institutional investors could shift their capital toward newly constructed properties rather than existing homes, depending on how the law’s exemptions are applied.
“Built-to-rent is an exemption to this legislation, so it wouldn’t surprise me if maybe some of the ones who are buying existing homes are instead deciding to allocate that capital to new construction and things like that,” he said.
The law’s exemptions include certain inter-investor transfers and properties receiving at least $15,000 in capital improvements. Those provisions could affect how institutional investors allocate capital going forward.
Not a concern for the broader housing market
Malone said the decline in institutional investor activity is not necessarily a major concern for the broader housing or rental markets because large investors represent a relatively small share of the overall market.
Cotality has not found a detectable effect on home prices or rents in cities where investor activity has declined, Malone said. He noted that more localized effects could take longer to identify because there are fewer transactions at the neighborhood level.
Despite the focus on institutional investors, Malone said the largest investors remain a relatively small portion of the overall market. Their impact can nevertheless be more noticeable to individual homebuyers who compete directly against them.
Large investors often pay cash and can waive financing, appraisal and, in some cases, inspection contingencies, Malone said. That can make it difficult for individual buyers to compete for a property when an investor is particularly interested in it.
“There is something to sympathize with amongst buyers, and you could see why frustration would be born from,” Malone said. “But it’s just sort of not widespread enough to be a common story.”