Share of purchased homes bought

by investors, in 40 major metro areas

15%

15%

2021

Q4

10

5

Start of

pandemic

0

2000

2010

2021

Share of purchased homes bought by investors,

in 40 major metro areas

15%

15%

2021

Q4

10

5

Start of

pandemic

0

2000

2010

2021

Investors bought a record share of homes in 2021. See where.

An analysis of 40 major metro areas revealed unequal levels of investor activity, with southern cities and Black neighborhoods disproportionately affected

Last year, investors bought nearly one in seven homes sold in America’s top metropolitan areas, the most in at least two decades, according to the realty company Redfin.

Those purchases come at a time when would-be buyers across the country are seeing wildly escalating prices, raising the question of what impact investors are having on prices for everyone else. Investors were even more aggressive in the final three months of the year, buying 15 percent of all homes that sold in the 40 markets.

Explore the data for 40 metro areas

Atlanta, GA

25 percent of homes purchased in this area last year were bought by investors — more than the typical metro. That’s higher than its 2015 rate of 12 percent.

Share of purchased homes bought by investors

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5%

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25%

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 Hover over a Zip code to view details

Real estate investors can be large corporations, local companies or wealthy individuals, and they generally don’t live in the properties they are buying. Some look to flip homes to new buyers, while others rent them out.

Neighborhoods where a majority of residents are Black have been heavily targeted, according to a Washington Post analysis of Redfin data. Last year, 30 percent of home sales in majority Black neighborhoods were to investors, compared with 12 percent in other Zip codes, The Post’s analysis shows.

“We know historically that places where minorities live are undervalued or lower priced,” Redfin’s Sheharyar Bokhari said. That, he said, makes them more attractive to investors, driving up prices for residents.

[This block used to be for first-time homebuyers. Then global investors bought in.]

The effect of investor activity differs city to city. Regions with the highest share of investor purchases are in the south, stretching from Florida to Arizona, with a quarter of all home sales in Atlanta and Charlotte last year going to investors. But some of the most targeted Zip codes overall are in the Rust Belt, especially heavily minority neighborhoods in Detroit and Cleveland.

The growing number of investor purchases has drawn increasing scrutiny from Democratic lawmakers on Capitol Hill, particularly as buyers target minority neighborhoods.

“One of the reasons housing prices have gotten so out of control, is that corporate America sensed an opportunity,” said Sen. Sherrod Brown (D-Ohio) last week at a hearing of the Senate Committee on Banking, Housing and Urban Affairs, a panel he chairs.

Brown took direct aim at private equity firms and corporate landlords in particular.

“They bought up properties, they raised rents, they cut services, they priced out family home buyers, and they forced renters out of their homes,” he said.

Investors have been snapping up homes in and around downtown Cleveland at a staggering rate, putting three of the city’s Zip codes among the top 15 nationally in the rate of investor purchases last year.

Sally Accorti Martin, the former longtime housing director for South Euclid, a small city east of Cleveland, testified at the hearing that a majority of the city’s roughly 1,600 rental units are now owned by companies from other states, and that tenants have suffered as a result.

Martin said the city passed a series of ordinances aimed at stopping predatory behavior, to limited effect. One provision, called “pay to stay,” allows tenants to pay any unpaid rent and fees up until their eviction hearing.

“Unlike mom and pop landlords, large out-of-state investors typically don’t have much empathy for their tenants,” she said. “Residents can be a day late in paying rent and face an eviction notice.”

In other cases, investors buy properties that might otherwise be the first home purchases for families looking to accrue wealth that they can pass down to their children or grandchildren. A lower homeownership rate among minorities has contributed to a much lower rate of wealth accumulation.

“There is a massive racial homeownership gap in this country, which is a serious problem because owning a home is a key to building intergenerational wealth and reducing racial inequality overall,” Sen. Robert Menendez (D-N.J.) said.

In the hearing, Democrats as well as Republicans on the committee, led by Sen. Patrick J. Toomey (Pa.), raised concerns about an underlying problem: the stringent zoning rules in many cities that prevent more homes from being built.

Bokhari, from Redfin, echoed that concern in discussing his research. In the shortage that comes from too few homes being built, he said, there is profit to be made. “If we were building enough housing there wouldn’t be as much investing activity in the housing we have,” he said.

“If we had enough homes to meet this demand,” he added, “everyone would be able to buy a home.”

Ted Mellnik contributed to this report.

About this story

The Post analyzed Zip code-level data provided by Redfin. Redfin defined investors as buyers whose name included the keywords “LLC,” “Inc,” “Corp” or “Homes,” or whose ownership code includes the keywords “association,” “corporate trustee,” “company,” “joint venture” or “corporate trust.” (For our analysis, Redfin excluded the buyer keyword “Trusts” from its analysis to be more conservative in its findings, since some families own their homes through trusts.) Redfin included the 40 most populous metros where counties disclose sales prices. Redfin’s metro boundaries are either Metropolitan Statistical Areas or metropolitan divisions, depending on the metro.

The Post excluded Zip codes with fewer than 10 sales in 2021 from the maps, and those with fewer than 25 sales from the race and income analyses.

Race and income data is from the U.S. Census Bureau.

Kevin Schaul is a senior graphics reporter for The Washington Post. He holds corporations accountable using data and visuals.
Jonathan O'Connell is a reporter focused on business investigations and corporate accountability. He has covered economic development, commercial real estate and President Donald Trump's business. He joined The Post in 2010.