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Dallas

Investors behind nearly a third of Dallas-area home purchases

Most are not mega-funds, but their share of home purchases is growing

Investors Behind Nearly a Third of Dallas-Area Home Buys
Thomas Malone of CoreLogic (Illustration by The Real Deal with Getty, CoreLogic)

Even as home sales slumped across Texas this year, investors made moves in single-family markets. 

Investors bought nearly a third of the homes recently sold in the Dallas area, the Dallas Morning News reported. That’s well above the average: nationwide, just over a quarter of home sales went to investors, according to CoreLogic. 

Six of the top 20 cities by investor homebuying percentage were in Texas. 

As the year progressed, investors’ share of home purchases crept up to 28 percent. Not all of them were by massive private equity funds. A clear majority of investor purchases were made by companies owning fewer than 100 homes.

“Given this trend, it would not be surprising to see these numbers climb above 30 percent in the fourth quarter of 2023,” CoreLogic economist Thomas Malone wrote.

McAllen and El Paso were the top two cities in Texas, with 41 percent and 38 percent of home sales going to investors, respectively. They weren’t the highest, though: in San Jose, California, investors’ share of home buys was 46 percent. In Los Angeles, it was 41 percent.

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Brownsville was the only other Texas city in the top 10, while Dallas, Houston and Beaumont appeared in the top 20. 

Investors bought far fewer homes this year than in previous years, with higher mortgage rates a likely culprit for the slowed dealflow. Accordingly, home flips declined by nearly 30 percent in DFW in the first half of the year. 

Companies have found other ways to make inroads into Texas’ booming single-family home market. Some, like ARK Homes for Rent, are spending heavily to build up their portfolios, expecting activity to return in droves when rates decline. ARK recently said that it would buy and develop $3 billion in single-family rental and built-to-rent properties over the next five years. 

—Joe Lovinger

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CorelogicPrivate EquityResidential Real EstateSingle Family Rentals