Inside the Midwestern state where real estate investors are snapping up a record share of homes
New data shows that real estate investors are increasingly buying homes in the Midwest.
According to analysts, investors bought 14.8 percent of homes in the first quarter of 2024. Realtor.com 2024 Q1 Investment Report – the highest percentage ever recorded since the group began tracking in 2001.
Missouri is the most popular market, with three cities in the top five cities with the highest share of investor purchases.
In Springfield, investors bought 20.5 percent — nearly 1 in 5 — of the homes. In Kansas City, 20.1 percent and in St. Louis, 18.9 percent of the purchases were made by investors.
“Investors are typically the first to exit the market, as we saw in 2023, and the first to return, as we’re already seeing,” said Hannah Jones, senior economic research analyst at Realtor.com.
Missouri is the most popular market for investors, with three cities — including St. Louis (pictured) — ranking in the top five for the highest share of investor purchases.
“More buyers may choose to invest in affordable markets where more rental properties need to be available to secure a stable rental income stream.”
Rounding out the top five are investors who made 18.7 percent of purchases in Birmingham, Alabama and 18.2 percent in Memphis, Tennessee.
Small investors have accounted for the majority of purchases since the company began tracking them, accounting for 62.2 percent of investor purchases from January through March 2024.
Americans are drawn to the Midwest because of its relatively affordable housing, especially as home prices elsewhere in the U.S. soar.
The Midwest is also less vulnerable to natural disasters, with surveys showing that homebuyers are increasingly concerned about wildfires, tornadoes, floods and hurricanes.
According to Realtor.com, the average asking price in Springfield is $280,000, in Kansas City it’s $285,000, and in St. Louis it’s $207,500.
In Kansas City (pictured), 20.1 percent of homes purchased in the first quarter of 2024 were bought by investors
Rents in the Midwest have been rising due to the strong labor market and increased demand, making it attractive for investors to purchase a home here.
A 2023 study by the Mid-America Regional Council found that of the 157,000 single-family rental properties in Kansas City, nearly 20 percent are owned by individuals or businesses with 10 or more properties.
Thirty-three companies own nearly 14,000 homes in the Kansas City area, with five owning nearly 8,000 homes.
‘[Investors are] “We’re purposefully targeting what was originally intended to be owner-occupied housing and converting it into rental housing,” said Josh Akers, research manager for the Mid-America Regional Council. The baking.