Layla Zulfa
Washington D.C. – A significant legislative push aimed at curbing the influence of institutional investors in the single-family housing market has cleared a major hurdle in the Senate. The 21st Century ROAD to Housing Act, which passed overwhelmingly on Thursday, includes a contentious provision titled "Homes Are for People, Not Corporations." This measure seeks to introduce new restrictions on entities that own 350 or more single-family homes, limiting their ability to acquire additional properties. Proponents of the bill, including many legislators and politicians, argue that these restrictions will bolster housing affordability by increasing the supply of homes available to individual buyers. However, a growing body of economic analysis suggests that the actual impact of such measures may be considerably less substantial than anticipated, particularly at a national level.
The legislative action comes at a time when concerns over housing affordability continue to resonate across the country. The median home price in the United States has seen a significant rise over the past decade, driven by a complex interplay of factors including limited new construction, fluctuating interest rates, and increased demand. In this environment, the role of large-scale investors in the housing market has become a focal point of public and political debate. The "Homes Are for People, Not Corporations" provision directly targets what is perceived by some as a trend of large financial entities acquiring single-family homes, potentially converting them into rentals and thereby diminishing opportunities for first-time homebuyers and owner-occupiers.
However, recent data analysis from Realtor.com challenges the premise that institutional investors represent a dominant force in the current single-family housing landscape, particularly when viewed through the lens of the proposed legislation. A report published on Friday by Realtor.com economists Jake Krimmel and Hannah Jones indicates that between 2015 and 2025, institutional investors – defined for the purpose of their study as entities making over 350 single-family purchases since 2015 – accounted for a mere 12% of all investor purchases over the past decade. More strikingly, their share of all single-family home purchases nationwide during this period was only 1%.
The Realtor.com study further reveals a declining trend in the proportion of institutional investor activity. In 2015, institutional investors comprised 12.2% of all investor purchases. This share experienced a peak of 16.3% in 2021, a period marked by heightened market activity and investor interest, but has since decreased to 7.5% by 2025. This downward trajectory suggests that the market dynamics may already be shifting in a direction that would render the proposed legislative ban less impactful than it might have been a few years prior.
"One of the biggest takeaways is that from a national perspective, the largest investors account for a really small proportion of single-family home purchases and that share has decreased in recent years," Krimmel stated in an interview with HousingWire. "So the ban is going to have less of a bite now than it would have had it been enacted a few years ago. It is attacking a trend that is already decreasing as opposed to one that is becoming increasingly part of the market."
The Dominance of Smaller Investors
In stark contrast to the limited footprint of institutional investors, the Realtor.com report highlights the significant role played by smaller-scale investors in the single-family housing market. Investors who purchased fewer than 10 homes accounted for approximately 53% of all gross investor purchase activity over the past decade. Medium-sized investors, defined as those acquiring between 10 and 99 homes, represented 27% of the market, while large investors, with purchases between 100 and 349 homes, made up 8%. Cumulatively, these smaller and medium-sized investors constitute the vast majority of investor activity in the single-family sector.
Over the ten-year period examined, investors collectively purchased approximately 5.5 million single-family homes. During the same timeframe, non-investors, which includes individual homebuyers and entities not classified as investors, purchased a substantially larger 58 million single-family homes. This data underscores that while investor activity is a component of the housing market, owner-occupier purchases remain the predominant form of transaction.
Geographic Concentration of Institutional Investment
While institutional investors represent a small fraction of the overall market, their activity is not evenly distributed. The Realtor.com report identifies a significant geographic concentration of institutional investor purchases, with a disproportionate share occurring in specific metropolitan areas and even within particular ZIP codes. The top 10 metropolitan areas by total institutional investor activity account for over 50% of these purchases, and the top 25 metros represent a commanding 75%.
Among the top 10 metros with the highest share of institutional investor purchases relative to all home purchases, several stand out. These include Memphis, TN-MS-AR (4.4%); Colorado Springs, Colo. (4.3%); Charlotte-Concord-Gastonia, NC-SC (4.2%); Atlanta-Sandy Springs-Roswell, Ga. (3.8%); Birmingham, Ala. (3.8%); Dallas-Fort Worth-Arlington (3.6%); Raleigh-Cary, North Carolina (3.5%); Indianapolis-Carmel-Greenwood, Ind. (3.5%); Winston-Salem, North Carolina (3.1%); and San Antonio-New Braunfels, Texas (3.0%).
Looking at the broader category of all investor purchases, the Memphis metro area also reported the largest share at 19.2%, followed by Birmingham (15.7%), Raleigh (15.0%), and Dallas-Fort Worth (13.9%). However, when considering the sheer volume of homes purchased by investors, the Dallas-Fort Worth metro area led the nation between 2015 and 2025 with 65,579 total investor purchases. Atlanta followed with 57,691 homes, Houston with 41,870, Phoenix with 39,888, and Charlotte with 29,998.
The report further illustrates the intense concentration of institutional investor activity within specific submarkets. Houston, for instance, was highlighted as a metropolitan area where institutional investor purchases over the past 11 years were heavily concentrated in just 10 ZIP codes, where they captured up to 73% of the local investor market. Despite this high concentration in certain ZIP codes, institutional investors represented, at their peak of activity within these areas, just 10% of all sales activity.
This localized intensity of institutional investor presence is acknowledged as a key reason for the strong public and political reaction to the issue. "The concentration is why this delivers such a visceral reaction especially from people who are living in those particular metros or ZIP codes," Krimmel explained. "But this type of situation is much more the exception than the rule, so as a result, we don’t think this is really going to move the needle on affordability, as it is in just a handful of ZIP codes, which will not move prices at a metro level let alone at a national level."
Analyzing the Potential Impact of the Investor Ban
The Realtor.com report suggests that the limited scale and high geographic concentration of institutional investor activity may constrain their overall impact on pushing out potential homebuyers at a metropolitan level. Consequently, the report argues that any proposed investor ban should carefully weigh "the concentrated, short-term benefits of adding a small fraction of homes to the market against the risk of adding yet another barrier to new housing supply in the long run."
It is also crucial to consider the cyclical nature of institutional investor activity, which is demonstrably sensitive to financing conditions and broader macroeconomic trends. Should economic conditions shift, their participation in the market could potentially increase, altering the impact of any regulatory measures. The report points to historical instances where institutional investors significantly increased their presence in the market.
"The genesis of institutional investors coming into the market was the very unique and unfortunate position the market was in after the financial crisis. The housing market was in a really unhealthy position and there was all this stock, so investors came in," Krimmel recalled. "The other time we saw this was during the pandemic and that was another historical anomaly."
Even in the event of future market conditions that might incentivize a resurgence of institutional investor activity, the report concludes that an institutional investor ban is unlikely to deliver "rapid inventory relief or meaningfully alter national, or even metro level, affordability conditions in the short run."
Alternative Strategies for Housing Affordability
Given the anticipated limited impact of the proposed investor ban on national or even metropolitan housing affordability, the Realtor.com report advocates for alternative strategies that address the fundamental drivers of housing shortages. These include reforms to zoning regulations that facilitate increased housing density and streamlined approval processes for new construction, as well as initiatives aimed at boosting overall housing supply.
"While restricting large-scale acquisitions might provide a modest, one-time injection of inventory into select neighborhoods, it does not address the underlying need for new construction," the report emphasizes.
Additional data from Cotality, a real estate analytics firm, corroborates these findings regarding the composition of investor activity. A report published by Cotality in mid-February indicated that small investors (those who purchased fewer than 10 homes) represented the largest share of investor purchases, accounting for 13.9% of all investor transactions as of early December 2025. Medium investors (owning between 10 and 99 homes) followed at 10.8%, large investors (100 to 1000 homes) at 3.0%, and mega investors (over 1000 homes) at 2.8%. Cotality also noted a slight decrease in the overall share of investor purchases in 2025, falling from 31.9% in January to 30.3% in December, though this figure remains higher than the 25.5% recorded in 2021.
Cotality’s data also identified geographic patterns, with the San Jose metro area exhibiting the largest share of investor purchases in 2025, while Atlanta recorded the highest share of mega investor purchases. Similar to the Realtor.com report, Cotality’s findings indicated that the Dallas metro area saw the greatest number of homes purchased by investors in 2025, followed by Houston, Atlanta, Phoenix, and New York.
The 21st Century ROAD to Housing Act, having passed the Senate with substantial bipartisan support, now proceeds to the House of Representatives for consideration. It remains to be seen whether the data presented by Realtor.com and Cotality, alongside concerns voiced by various trade groups and housing industry stakeholders, will influence the legislative process as the bill moves closer to potentially being signed into law by President Donald Trump. The debate over the efficacy and unintended consequences of restricting institutional investors in the housing market is expected to continue as policymakers deliberate on the best path forward for addressing the nation’s pressing housing affordability challenges.
