The Senate passed the 21st Century ROAD to Housing Act on Monday by an 85-to-5 vote, a legislative move targeting large institutional investors in the single-family home market. Yet fresh data suggests the law may have limited effect on housing affordability, as smaller investors have stepped in to fill the void left by retreating mega-buyers.
According to a Realtor.com report released Monday, investors purchased approximately 534,000 homes in 2025, a 0.7% year-over-year increase, while non-investor sales fell 2.1%. Investor share of all purchases edged up to 11.3% from 11.0% in 2024, marking the third consecutive year above 11%. Overall home sales remain 14.3% below pre-pandemic levels, while investor acquisitions have climbed 14.6% over the same period, underscoring a structural shift in buyer composition.
Mega-investors—entities with 350 or more cumulative purchases—now account for just 7.5% of all investor buying, their smallest share since 2011 and a volume decline of nearly 70% from their 2021 peak. Cotality principal economist Thom Malone noted a sharp drop in institutional activity: those owning 1,000 or more homes halved their purchases in early 2025. “Their retreat has not meaningfully reduced overall investor activity, as smaller ‘mom-and-pop’ investors have stepped in to fill much of the gap,” Malone told InvestmentNews.
Small investors—those with fewer than 10 total purchases—now represent roughly 63% of investor purchases in 2025, the highest concentration in over 15 years, per Realtor.com. Unlike larger operators that have moved to net-selling, small investors remained net buyers by approximately 53,000 properties. Their median purchase price of $330,000 sits about 25% below the overall market median of $440,000, placing them directly in the price tier most accessible to first-time and moderate-income buyers.
On the sell side, investor disposals eased for the first time in two years, falling from 448,000 to 442,000 properties. That reduction in supply from sellers unwinding pandemic-era positions has ongoing implications for already-constrained inventory levels.
While the pullback from institutional investors has not yet produced noticeable downward pressure on house prices, Malone said the legislation is not without impact. “Institutional investors do compete directly with first-time buyers, particularly through cash offers that sellers often prefer, even at a discount,” he noted. However, he added that the ROAD to Housing Act addresses a highly visible piece of the market, not the largest one, and that “meaningful progress on affordability will still depend on expanding supply.”
Meanwhile, consumer attitudes toward homeownership are showing their first meaningful recovery in three years. Bank of America's homebuyer insights report, conducted with the Bank of America Institute, found that 53% of respondents now consider buying preferable to renting or moving in with family, reversing a run of pessimism through 2024 and 2025. The proportion viewing a home as a valuable investment jumped from 79% to 90% in a single year, while those citing stability as a key benefit rose from 83% to 94%.
The share of prospective buyers pointing to expensive home prices as their primary obstacle rose from 46% to 58%, and those citing high interest rates climbed from 40% to 47%. However, fewer buyers say they are waiting for prices and rates to fall before committing—down from 75% to 71%—with Gen Z and millennials leading that retreat from the sidelines. Among existing homeowners, 52% expect to purchase another property, and 22% plan to do so within the next 12 months, up from 15% a year earlier.
The lock-in effect, which has kept many existing owners from listing due to sub-3% mortgages, appears to be gradually loosening. More prospective buyers said they would accept a higher rate to move to a more affordable area, secure their preferred home, or improve their location. Research from Unlock Technologies found that non-mortgage ownership costs—property taxes, insurance, and maintenance—now absorb close to 10% of median household income nationally, and more than 14% in Florida, New Jersey, New York, and California. Property insurance alone has climbed 74.8% since 2020.
For existing owners who accumulated equity through the pandemic years, the typical homeowner now holds more than $274,000 in that wealth. However, tapping it through a cash-out refinance would add more than $477 a month to the average mortgage payment, making access prohibitively expensive for most. For advisors, these trends underscore the importance of monitoring housing market dynamics as they affect client portfolios and retirement planning. For more on how institutional investors are navigating regulatory changes, see our coverage of Oregon Investors Allege Norada Capital Hid Ponzi Scheme in Promissory Notes and Affluent Investors Cut Alts Targets as Risk Awareness Rises.
