Did institutional investors ban themselves

IRVINE, Calif., June 4, 2026 - Cotality, a leading global property information, analytics, and data-enabled solutions provider, today released its latest update on investor activity in the U.S. housing market.

Investor activity dropped slightly to open 2026, falling from 30.1% of all single-family purchases in December to 27.7% in March. Though unaffordability has continued to drive strong rental demand, the most uncertain regulatory environment in recent memory has put many investors in a holding pattern, waiting for some sign of clarity.

"Mega investor share hasn't dropped so dramatically since iBuyers exited the market en masse in 2022," said Thom Malone, principal economist at Cotality. "While smaller investor classes pulled back mildly, mega investors dropped from around 250 home purchases a week to 100 after the New Year. With the regulatory environment becoming clearer, it is unknown whether investment will gear back up or if 2025 was the swan song of the post-pandemic period."

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Share of home purchases made by investors by month, January 2018 - March 2026

Data source: Cotality Public Records Data

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Investor purchases in Q1 2026 dropped by between 10,000 and 15,000 units per month. Still, they're buying more homes than they were before 2021 and the decline is marginal when compared to the drop in monthly owner-occupied purchases.

Since mortgage rates rose in 2022, owner-occupied purchases of single-family homes have been below the 200,000 threshold every January - a number that's in line with the recovery period of 2012-2016 and well below the surges seen in the pandemic market.

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Monthly home purchases made by investors and non-investors, January 2018 - March 2026

‍Data source: Cotality Public Records Data

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Mega investors, who own more than 1,000 properties, retreated in the face of a potential ban on institutional investment. This halved their market share from 2.5% to 1.3% from December to January. Large (100-999 properties) and medium-sized (10-99 properties) investors also decreased their presence, falling from 2.5% to 1.9% and from 10.6% to 9.1%, respectively.

Small investors (3-9 properties) picked up the slack and continued their dominance of the landscape, increasing their share from 14.1% to 15%. This lends credibility to the idea that if institutional investors are banned, their purchases will mostly be replaced by other, smaller investors.

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Share of investor purchases by investor size, January 2018 - March 2026

Data source: Cotality Public Records Data

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Geographic trends in home investment

Investors are sticking to their tried-and-true playbook of buying in areas with high population growth. Dallas and Houston again ranked highest in both investor and non-investor purchases in 2025, and growing rental demand helped them maintain those rankings to start 2026. Atlanta, Phoenix, and Los Angeles rounded out the top five places where investors are buying.

Phoenix and Atlanta reinforce the tendency to buy in high-growth markets, but Los Angeles is something of an outlier. In Los Angeles, the combination of a shrinking population and municipal fast-tracking of accessory dwelling units is giving investors opportunities for a strong return on investment.

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Top 20 MSAs by total investor purchases, January-March 2026

Data source: Cotality Public Records Data

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The markets with the highest investor share differ from those with the highest number of purchases. In Dallas the number of investor purchases is high, but the metro falls to eleventh place when looking at share. Los Angeles, conversely, rises to second after San Jose. This reflects the extreme unaffordability of California metro areas and shows how it suppresses owner-occupied purchases relative to investor purchases.

As a result, investors' ability to shield themselves from pressures such as financing costs and the need for individual home insurance policies partially protects them from the rising costs individual buyers face in the Golden State.

Investor share in the Top 20 MSAs by investor purchases, January - March 2026

Data source: Cotality Public Records Data

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2026 home investor forecast

Though Q1 2026 saw only a minor shift in investor share, it's important to look at who is leaving the market. Mega investors shifting gears could portend major changes in the market. It could be that if institutional investment is banned and investors have clarity about what types of homes they can and cannot buy, big investors will come back into the market. However, many large investors, particularly those backed by private equity, could permanently decide to move capital to other asset classes.

Should mega investors exit the market during the summertime when owner-occupied purchases hit their peak, investor share could dip below 25% by midyear. Still, market shifts will largely remain interest rate-dependent. All told, the future of investors in the market is hazy, but a small drop in their share is the most likely scenario for 2026.

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Methodology

The Cotality Investor Purchase Indicator defines an investor as a buyer that owns three or more properties. Small investors are defined as those with fewer than 10 properties, medium investors as those with fewer than 100, large investors as those with fewer than 1,000, and mega investors as those with more than 1,000. It is an investor purchase indicator, rather than an investment purchase indicator, meaning that it identifies purchases made by investors but makes no judgment about how the property will be used. For this analysis, only arm's-length purchases of single-family homes (detached houses and townhomes) are considered.

‍About Cotality

Cotality accelerates data, insights, and workflows across the property ecosystem to enable industry professionals to surpass their ambitions and impact society. With billions of real-time data signals across the life cycle of a property, we unearth hidden risks and transformative opportunities for agents, lenders, carriers, and innovators. Get to know us at https://www.cotality.com.  

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