The share of single-family homes sold to investors peaked at nearly 30% at the start of this year, but these types of transactions dropped significantly in the ensuing six months, according to a CoreLogic report released Wednesday.

Investor purchases began to decline in March 2024 and by June represented 23.4% of all U.S. home sales. That was the lowest share in two years, CoreLogic economist Thomas Malone noted in the report. But investor activity is still higher than it was prior to the COVID-19 pandemic, when their purchase share bounced between 15% to 20%.

”The decline since March is sharp, but it is not clear that it will last,” Malone wrote. ”This drop could just be a seasonal movement that comes from (consumer) buyers being more active during the summer months. Whether the slump persists will be determined by whether buyers remain active this fall when interest rates are anticipated to drop.”

CoreLogic reported that the number of investor home purchases in June 2024 had been slashed to 80,000. That was down from 112,000 in June 2023 and nearly half of the peak rate of 149,000 purchases in June 2021, when mortgage rates bottomed out below 3%.

Real estate investors have been accused of driving up home prices across the country. A report released in May by the Government Accountability Office concluded while that large institutional investors like Blackstone Group and Invitation Homes may have influenced the rise in prices since the Great Recession, is it more difficult to assess whether they actually reduced homeownership opportunities.

CoreLogic added to this conclusion by noting that ”investors bring additional demand to the market, but not additional supply, so they impact prices.” But outside of a 12-month window in 2021 and 2022 where investor purchases and sale prices surged in tandem, ”the two variables don’t seem to move together.”

In July, Senate Democrats — led by Amy Klobuchar of Minnesota and Sherrod Brown of Ohio — introduced legislation that would require large corporations and private equity firms to report bulk purchases of single-family homes to the Federal Trade Commission (FTC) and the Department of Justice (DOJ) for antitrust review.

Lawmakers said at the time that the bill, which remains in the committee stage, would “stop anticompetitive transactions that could increase rents, decrease services, and push homebuyers out of the market.”

But institutional investors maintain a small presence in the context of the housing market at large, CoreLogic reported. Across the 20 largest U.S. metro areas, so-called ”mega investors,” or those that own at least 1,000 homes, represent about 1% of all purchases. Corporations that own at least 100 homes account for another 2%, while small investors who own fewer than 10 homes have a market share of 18%.

CoreLogic also separated home sales into three price buckets and found that investors accounted for 29% of all purchases in the least expensive tier — i.e., starter homes. They represented 22% of all sales in the mid-priced tier and 21% of all sales in the most expensive tier.

”Investors favoring lower priced homes is in line with historical trends. However, their presence in this tier is still elevated when compared to levels seen prior to the pandemic,” Malone wrote.   

”This trend is concerning for first-time homebuyers, who often look in the same tier and are likely facing increased competition from investors. However, decreased affordability may also be keeping first-time buyers in the rental market, and investors are stepping up to fill the gap.”