Local investors have officially surpassed builders in adding new housing supply in many markets, according to a new report from New Western. In 2025, investors have brought 30,852 renovated single-family homes back to market in New Western coverage areas — far exceeding the 18,973 new builds sold this year. Kurt Carlton, co-founder and president of New Western, told the imbalance is striking. “There’s a huge need for affordable housing, and the builders can’t supply it, but we have 15 million vacant homes,” he said. “They’re highly educated, corporate refugees that have left high incomes, looking for something more autonomous, and they’re taking those management skills, rehabbing these houses and bringing them back to the market. Some are making income beyond what they were seeing in the corporate sector. Institutional investors accounted for only 1.93% of all home purchases in Q1 2025 and just 6.6% of investor purchases, down 62% from their 2021 peak. Most operate close to home — with 68% investing within 30 miles of where they live. About 78% plan to purchase just one to five properties in the next year. Carlton argued that policymakers don’t yet grasp the role these small investors play. The Neighborhood Homes Investment Act would create a federal tax credit to build and rehabilitate affordable homes for urban, suburban, rural and tribal communities. More than 70% of revitalized homes are purchased off-market — never showing up in MLS data, according to the report. Carlton said the omission distorts the picture. There’s a million that are off-market. These are generally not habitable. It’s the type of house that a local real estate investor really needs to buy and revive.” Revitalized homes typically re-enter the market at significantly lower price points than both existing homes and new construction. The report found the average existing home sale price was 54% higher than the average revitalized home — and the median existing home price was 17% higher. Compared to new builds, revitalized homes are often 35% to 80% less expensive. “It’s really challenging for builders to supply affordable inventory in the areas that need it,” Carlton said.