BiggerPockets Daily Investor Activity Cools Despite Falling Rates
Dec 19, 2025
Investor activity is showing signs of cooling, despite a slight increase in home purchases. Rising losses and shrinking margins are making profits harder to find for investors. The market is experiencing stable prices, but high financing costs are squeezing returns. Growing economic uncertainty, influenced by tariffs and geopolitical issues, is also impacting investor confidence. Long-term rentals are becoming the preferred strategy, as softer rent growth and stricter short-term rental regulations complicate opportunities. What's next for the market?
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Small Purchase Gains, Bigger Profit Problems
- Investor purchases rose 1% year-over-year in Q3 but the headline masks weaker fundamentals.
- Investor profit margins are shrinking and more homes are selling at a loss, reducing enthusiasm.
Lower Rates Haven't Restarted Leverage
- Falling mortgage rates haven't fully revived investor activity because many buy in cash and avoid leverage.
- Expensive renovation and financing costs still compress returns even for cash buyers.
Don't Buy If Rehab Financing Breaks The Math
- Avoid deals where high prices plus elevated financing make margins too thin to absorb renovation or carrying costs.
- Account for expensive rehab financing before committing, even on cash purchases.