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Housing markets attracting—or losing—investors, as illustrated by 2 charts

New data from Parcl Labs reveals how the share of single-family homes owned by investors shifted by market between March 2021 and March 2024.

Author

Lance Lambert
April 23, 2024

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As mortgage rates jump and affordability strains deepen, the once-hot real estate markets of San Francisco, San Jose, and Los Angeles are feeling the heat, witnessing an exodus of investors. While some lower cost markets, like Indianapolis and Birmingham, are still drawing in investors.

This shift is something that ResiClub and Parcl Labs have been tracking for quite some time.

For today’s issue, we delved deeper using new data from Parcl Labs, a fast-growing real estate data company, to determine how the aggregate share of single-family homes owned by investors shifted across 52 of the nation’s largest metro-area housing markets between March 2021 and March 2024.

Among the 52 metro-area housing markets measured by Parcl Labs, these 5 saw the investor share of single-family ownership rise the most:

  1. Memphis: +1.46 percentage point

  2. Atlanta: +1.32 percentage point

  3. Birmingham: +1.32 percentage point

  4. Indianapolis: +1.21 percentage point

  5. Charlotte: +1.04 percentage point

Among the 52 metro-area housing markets measured by Parcl Labs, these 5 saw the investor share of single-family ownership fall the most:

  1. San Francisco: -4.05 percentage point

  2. San Jose: -3.95 percentage point

  3. San Diego: -3.84 percentage point

  4. Sacramento: -3.95 percentage point

  5. Los Angeles: -3.20 percentage point

Click here to view an interactive version of the map below

Why are investors pulling back from markets like San Francisco?

The spike in mortgage rates exacerbated affordability challenges, rendering fewer properties viable for cash flow investments. This was particularly significant in already high-cost markets like San Diego and Seattle, where finding cash flow was already challenging.

Why are investors pushing into markets like Memphis and Charlotte?

Investors have shifted their focus to housing markets with greater affordability, such as Memphis, where a greater number of cash-flowing homes are available on the market. Or investors are looking at markets with better outlooks for population growth, like Charlotte, which are likely to experience better long-term jumps in rental growth.

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