Are Investors Buying All the Homes in Texas?
How Investor Activity Can Help—and Hurt—Texas Communities
Investor activity in the housing market has become one of the most widely discussed real estate topics in Texas. Some believe investors are taking homes away from families, while others argue they play an important role in maintaining and expanding housing supply.
The reality is that both perspectives contain elements of truth.
Research cited by the National Association of Realtors found that approximately 28% of homes sold in Texas in 2021 were purchased by companies or corporations, the highest share in the United States.¹
However, the definition used in that research included purchases made by corporations, companies, or LLCs, meaning it captured many types of buyers—from small landlords to large institutional investors.
Understanding how investor activity affects communities requires looking at both the benefits and the potential challenges.
How Investor Activity Can Benefit Communities
While investors are sometimes portrayed negatively, they can play several constructive roles in housing markets.
Revitalizing Older Homes
Investors frequently purchase properties that need significant repair or renovation. These homes may have been difficult for traditional buyers to finance due to their condition.
By renovating older or neglected properties, investors can:
- improve neighborhood housing quality
- increase property values
- return homes to livable condition.
In many cases, these renovations can help stabilize neighborhoods that might otherwise experience property decline.
Increasing Rental Housing Supply
Not everyone is in a position to purchase a home. Rental housing is an important part of a healthy housing ecosystem.
Investors often convert homes into rental properties, which can provide housing for:
- people relocating for work
- families saving to purchase a home
- residents who prefer renting over owning.
In rapidly growing states like Texas, rental housing can help accommodate new residents.
Speeding Up Property Turnover
Investors often have the ability to purchase homes quickly, particularly those requiring repairs. This can help move properties that might otherwise sit on the market.
In certain cases, investor purchases can prevent properties from remaining vacant or deteriorating over time.
Potential Challenges for Homebuyers
Despite these benefits, investor activity can also create challenges—particularly in certain market conditions.
Increased Competition for Entry-Level Homes
Investors often target homes in lower and middle price ranges because those properties typically generate stronger rental returns.
As a result, first-time buyers searching for starter homes may find themselves competing with investors offering cash or quick closings.
Shifts Toward Rental Communities
When a large number of homes in a neighborhood become rental properties, it can change the character of a community.
Some critics argue that high concentrations of rental homes may lead to:
- fewer long-term homeowners
- reduced neighborhood stability
- changes in community engagement.
However, these outcomes can vary widely depending on property management and neighborhood characteristics.
Where Corporate Investors Are Most Concentrated
Investor activity is not evenly distributed across the housing market. Research shows that large institutional investors tend to cluster in specific metropolitan areas and neighborhoods.
Studies from the Joint Center for Housing Studies of Harvard University show that nearly 45% of single-family homes owned by large institutional investors are located in just six metropolitan areas, including:
- Atlanta
- Phoenix
- Dallas
- Charlotte
- Houston
- Tampa.²
At a broader level, housing research suggests that a relatively small number of counties account for the majority of institutionally owned homes nationwide, meaning corporate ownership is concentrated in limited locations.
Even within those cities, investor ownership tends to cluster in specific neighborhoods—often where housing is more affordable and rental demand is strong.
This helps explain why some communities experience intense investor competition while others see relatively little.
The Role of Small Investors
Another important factor often overlooked in this discussion is the role of smaller investors.
Research from the Urban Institute shows that most single-family rental homes are owned by investors with fewer than five properties.³
Similarly, the Harvard Joint Center for Housing Studies reports that individual investors dominate the single-family rental market, often owning only one or two homes.
This suggests that many investor-owned homes are actually held by individual landlords rather than large institutional firms.
Investor Activity in Texas:
From the Pandemic Boom to Today
Investor purchases surged during the housing boom of 2020–2021, when mortgage rates were historically low and housing demand was exceptionally strong.
During that period, investors purchased about 28% of Texas homes sold in 2021.¹
However, investor activity has shifted since that peak.
As mortgage rates increased and housing markets cooled, investor purchases declined across many regions of the United States. Higher borrowing costs reduced profit margins, particularly for investors relying on financing rather than cash purchases.
This shift highlights an important reality: investor activity in housing markets tends to move in cycles, responding to economic conditions such as interest rates, home prices, and rental demand.
How Federal Policy Could Influence
Investor Activity
The debate over investor ownership has also reached the federal level.
President Donald Trump has supported policies aimed at limiting the role of large institutional investors in the housing market.
Recent housing legislation discussed in Congress proposes restricting large institutional investors from purchasing additional single-family homes once they reach a certain portfolio size.
Supporters argue that limiting large corporate purchases could:
- increase the number of homes available to families
- reduce competition from institutional buyers
- improve access to homeownership.
Critics, however, caution that restricting investor activity could also have unintended consequences, particularly if it reduces investment in housing development or rental supply.
At this stage, the long-term impact of these policy proposals remains uncertain.
(As of now, federal legislation that would restrict large institutional investors from purchasing additional single-family homes has passed the U.S. Senate but has not yet become law. The measure is part of the
21st Century ROAD to Housing Act, which would limit companies that control 350 or more homes from buying additional single-family properties. The bill must still be reconciled with the House version before it can be enacted.)
What This Could Mean for
Texas Housing Markets
If federal policies limiting institutional investor purchases move forward, the impact could vary significantly across housing markets.
Texas cities frequently appear in studies of investor concentration due to their strong population growth and rental demand. Because of this, some analysts believe federal restrictions could modestly reduce investor competition in certain neighborhoods.
However, many researchers note that small landlords still own the majority of single-family rental homes, meaning restrictions targeting large corporate investors may only affect a portion of the market.
Any changes would likely be felt most strongly in areas where institutional ownership is already concentrated.
Finding Balance in the Housing Market
Investor activity is neither entirely beneficial nor entirely harmful. Instead, it represents one component of a complex housing ecosystem.
In many communities, investors help maintain housing supply, renovate aging properties, and provide rental housing. At the same time, high levels of investor activity—particularly in entry-level housing—can create additional competition for some buyers.
Understanding how these forces interact helps communities, policymakers, and homebuyers make more informed decisions about the future of housing.
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[1] Texas Standard. Investors bought nearly a third of homes sold in Texas last year. June 14, 2022. Reporting based on research from the National Association of REALTORS® analyzing 2021 home sales.
https://www.texasstandard.org/stories/texas-home-sales-investors-bought-nearly-a-third-in-2021/
[2] Harvard Joint Center for Housing Studies. America’s Rental Housing Report. 2023.
https://www.jchs.harvard.edu/research-areas/reports/americas-rental-housing-2023
[3] Urban Institute. Institutional Investors and the Single-Family Rental Market. 2021.
https://www.urban.org/research/publication/institutional-investors-single-family-rental-market
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