Investors Are Snapping Up Homes In These Affordable States—But All-Cash Sales Fall To The Lowest Level Since 2008

Source: Realtor.com, Kiri Blakeley
Photo: Courtesy of Realtor.com

Home prices are reaching new highs and mortgage rates aren’t budging, making more affordable states appealing to real estate investors.

“Investors are keenly aware of economic growth and housing demand, but must balance home price with potential returns,” says Realtor.com® senior economic research analyst Hannah Jones in the latest Investor Report.

Last year, 13% of homes bought were purchased by an investor. Despite the rise of interest rates and prices, slightly more investors bought properties last year than in 2023. However, the investor buyer share still lagged behind the 2022 peak of 13.3%.

Less cash, more debt

And in a slightly troubling sign, all-cash investor sales fell to the lowest level since 2008, but they remained nearly double the cash share of total home sales. Both mom-and-pop and corporate investors were more likely to take on debt to finance a purchase.

“The 2024 housing market boasted more for-sale inventory than at any point back to the beginning of the [COVID-19] pandemic,” explains Jones. “More inventory means less competitive conditions, which likely led to fewer all-cash investor purchases.”

Additionally, the growing share of small investors means more of them are relying on mortgages to buy property, as mom-and-pop investors are less likely to have all cash on hand for a purchase.

Investors still lead the charge on cash purchases. Overall, 62.3% of investors purchased in all cash, nearly double the 33.4% of all buyers to do the same.

What draws investors to a state?

Price, of course, is key when it comes to where investors choose to spend their money.

The more affordable an area, the more likely it is to be a good bet for the real estate investor, whether for rentals or flipping. But it goes beyond that. Rental prices need to have held up better than national rents. Additionally, rental prices need to be affordable relative to local incomes. After all, if no one in the area can afford that plentiful rent, then, as a landlord, you have a problem.

A state where investors are flocking to right now? Kansas.

Kansas City, which straddles the Kansas-Missouri border, saw the highest rental price growth in the country in April 2025. And the state saw one of the highest year-over-year percentage growths of share of investor buyers, at 1%.

While asking rents dipped nationally in all size rentals by $29, or -1.7%, year over year, Kansas rents grew 4.9%, to $1,381 a month. This did mean a worsening affordability ratio for locals, especially in Kansas City, which was the only market in April to experience a higher rent share of income.

A typical household income in Kansas City would spend 20.7% of its monthly paycheck on the typical rental (which is still below the maximum of 30% recommended).

“Yields are attractive, not just that prices are lower but that rents are relatively high,” Douglas Bendt of Berkshire Hathaway HomeServices tells Realtor.com of Kansas. “Net yields of 6% are common, compared to 5% or less in many other regions, and 2% or less in expensive areas like New York or California.”

But Kansas doesn’t top the list for share of investor buyers. That would be Missouri at 21.2%, followed by Oklahoma, Kansas, Utah, Georgia, Montana, Mississippi, Wyoming, Indiana, and Alabama.

“The thing that almost all of these states have in common is relatively low prices,” Martin Orefice, the CEO of Rent To Own Labs, tells Realtor.com. “That means that investors can get good deals on existing properties, especially residential ones. With homeownership being harder and harder to achieve, more people are being forced to rent to make ends meet, and these investors are cashing in.”

It’s more than just affordability

Scarce inventory is a magnet for investors, too. Little inventory keeps pressure on renters to keep on renting. A landlord loves a market where renters don’t have too many options for graduating to buyers.

“Families have a hard time coming up with the deposit here to buy their own place,” Doug Valdez of Summit Realty in Sheridan, WY, tells Realtor.com.

Wyoming, like many other rural states, experienced a dramatic increase in prices during the COVID-19 pandemic.

“The first-time homebuyer is having trouble finding anything under $300,000,” Valdez says.

Rentals remain robust as in-migrants come to the mountain state for the strong job market, quality of life, abundance of outdoor activities, low crime, no income tax, scenic views, and proximity to the Denver airport.

“It’s one of the friendliest places,” adds Valdez. “People smile and say Hi to you. A lot of people moved here from out of state, and they say, ‘I’m not telling my friends where I live.'”

The states that saw the investor share pick up the most year over year in 2024 were all states with scarce inventory: Delaware (+3.8 ppts), Ohio (+2.2 ppts), DC (+1.8 ppts), Hawaii (+1.4 ppts), and Nevada (+1.3 ppts).

“Investors can take advantage of the high demand in these markets, especially as home prices in Ohio and Delaware tend to be lower than other markets nearby,” explains Jones.

Toledo, OH, is ranked as the top housing market overall in the Wall Street Journal/Realtor.com Housing Market Ranking, with investor buying as a major reason why. That report took into account affordability, a low cost of living, and climate resiliency for where states landed in the rankings.

And some states, while still high in share of investor purchasers, saw a decrease from 2023. Mississippi decreased the most, at -1.1%.

Here are the top 10 states where investors bought properties in 2024:

Missouri
Share of investor buyers: 21.2%
Year over year: +0.3%

Kansas
Share of investor buyers: 18.4%
Year over year: +1%

Utah
Share of investor buyers: 18%
Year over year: +0.3%

Montana
Share of investor buyers: 17.2%
Year over year: -0.1%

Mississippi
Share of investor buyers: 16.7%
Year over year: -1.1%

Wyoming
Share of investor buyers: 16.3%
Year over year: +0.9%

Alabama
Share of investor buyers: 15.9%
Year over year: +0.8%

Affordable cities attracting investors

Aside from affordable states where investor buyers are putting down cash, they’ve also been zeroing in on cities where they can get a good return. The popular regions are the South and Midwest—two of the most affordable regions in the U.S., as identified in the report.

Memphis, TN, Oklahoma City, OK, and St. Louis saw the highest investor buyer share with all but one of the top 10 markets seeing a median investor purchase price below $300,000. Five of the markets saw a median investor purchase price below $200,000.

Kiri Blakeley writes about trending news at Realtor.com. She has also worked at Forbes Magazine, Forbes.com, CafeMom, and DailyMail.com, covering everything from billionaires to celebrities to crime. Her work can be found in news outlets worldwide, including Yahoo, SF Gate, New York Post, Seattle-Post Intelligencer, Marie Claire, She Knows, Huffington Post, and New York Magazine. She has an M.A. in journalism from Columbia University. In her spare time, she writes psychological thrillers under a pen name. She lives in Brooklyn, and her cat foster Instagram account has over 4 million views.

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