First-quarter property purchases increased 0.5% year-over-year in the first quarter to 43,969, the real estate brokerage said. The change represented the first upward movement in new purchases since the second quarter of 2022. Numbers come through an analysis of trends in 39 of the largest U.S. markets. 

Buying activity, though, came up from recent lows. In the first quarter of 2023, investor activity had been down a whopping 48.6% compared to the year before. By the fourth quarter of 2023, purchase volumes were down by only 10.5% an annual basis.

Investor activity is still slower than the pace seen during the Covid-19 pandemic, but the share of homes they bought surging to its most elevated level in almost two years at 18.7%. The fourth-quarter share was 17.9%.

"Investors have seen their market share tick up because they've come off the sidelines faster than individual buyers," Redfin's report said. 

Redfin attributed their return to interest rate volatility, with movements less likely to factor in buyer decision making in the segment where 69% pay in cash. While investor activity moved upward, home sales overall decreased 3.9% year over year.

Single-family residential homes made up more than two-thirds, or 68.9% of all investor purchases, also a near two-year high. Condominium units and co-ops equaled 18.7%, townhouses 7.2% and multifamily dwellings 5.3%, each contracting from one year earlier.

Among other highlights for the real estate investment market, home flippers saw typical profits of 55.2%, or $174,616, on resale. The number improved from 46.3%, or $146,586, in the fourth quarter. Only 5.3% of flipped homes sold for a loss between January and March, compared to 13.7% last year.

But investors today may see more upside in renting out their investment properties, particularly single-family homes, Redfin said. Strong rent growth is leading to more favorable opportunities for revenue, with for-sale inventory limited. 

"I'm not seeing a lot of home flippers in our market, but there are a lot of investors looking for single-family homes to rent out, which are in short supply," said Dallas-based Redfin agent Connie Durnall.

Real estate investor purchases totaled $31.3 billion in the first quarter, up 6.6% from 12 months earlier, typically bought at a price of $464,560, which represented a 9.2% rise.

The impact of investors on affordability in today's housing environment is likely to be felt most acutely in the competition for entry-level properties nationwide. They accounted for approximately 26% of all homes purchased in the lowest-priced third of local markets. The share was at a record high.