Local Investors Outpace Builders in Delivering Affordable Homes
by New Western Staff
New Western, the nation’s leading real estate investment marketplace and largest home buyer, released its “Flip Side Report: Mid-Year 2025 Residential Real Estate Investing Trends,” showing that in most U.S. markets, local investors are now delivering more homes to buyers than builders — and doing so faster, at lower prices, and with greater community impact. These investors are reviving vacant or distressed, unlivable properties into move-in-ready homes, turning overlooked housing stock into much-needed inventory.
The Flip Side Report uncovers a major but underreported force in America’s housing market: small, independent investors revitalizing neglected properties into affordable, move-in-ready homes and, in the process, helping to close the nation’s housing affordability gap.
Last year, we flagged that local investors were on the verge of surpassing builders in supplying new housing inventory. We wrote:
“Flippers are nearly outpacing builders when it comes to adding new inventory to the housing market… endless opportunity remains for investors to bring additional livable homes to market.”
Now, that prediction has become reality.
In the markets analyzed, local real estate investors brought 30,852 renovated single-family homes back to market in 2025 — outpacing the 18,973 new builds sold in the same time frame.
The Growing Reality
Builders can’t build fast enough, especially in the affordable, entry-level segment. High construction costs, zoning constraints, and long timelines continue to limit new home supply. Meanwhile, investors are moving quickly — sourcing primarily vacant and uninhabitable homes, modernizing them, and returning livable inventory to the market.
This shift is fundamentally reshaping the housing landscape. These investors aren’t just flipping homes — they’re reviving them, breathing new life into neglected properties and helping meet the urgent demand for more affordable, move-in-ready housing.
And the opportunity isn’t slowing down. In these same markets alone, there are over 2.8 million vacant homes — part of a staggering 15 million nationwide — with even more coming as homeowners age out or downsize. It all adds up to a deep pipeline of properties ready for transformation.
While builders struggle to keep pace, local investors are stepping in and scaling up, becoming a powerful, grassroots force in solving one of America’s most pressing housing challenges.
“Everything you thought you knew about real estate is wrong. The data sets most people rely on don’t capture the full picture — entire slices of activity are missing. One of those missing pieces drove $900 million in real estate agent commissions in Q1 alone, in just 40 markets. Without those revitalized homes, that business wouldn’t have existed for agents, and those properties wouldn’t have been there for families to buy,” said Kurt Carlton, Co-Founder and President of New Western. “Our housing market is in a fragile state. If we continue down the path of deepening unaffordability — especially in the critical band of starter homes — we risk breaking the entire cycle of homeownership. It’s critical we understand the real forces at work so we can double down on the solutions that are truly driving change.”
Key Findings from the Report:
» In analyzed markets, local investors brought 30,852 revitalized homes to market in 2025, surpassing 18,973 new builds sold in the same period.
» Revitalized homes are 35% to 80% more affordable than new construction and often priced below existing home medians. Revitalized homes are 35% to 80% more affordable than new construction, and 17% more affordable than the market median existing home sales.
» Institutional investors account for just 1.93% of all home purchases; 93.4% of investment activity comes from small, local operators.
» Over 70% of flips begin off-market, bypassing the MLS, but after being revived and listed, they generate nearly $1 billion in Q1 realtor commissions — from inventory that wouldn’t exist without investors bringing it back to life.
» With 15 million vacant homes nationwide, there’s a massive untapped pipeline of properties ready for transformation.
New Western is the nation’s largest home buyer and a real estate investment marketplace that creates opportunity. We make investing more accessible for over 250,000 local investors through the largest private source of value-add properties in the nation. Learn more at newwestern.com. Download the full report: https://www.newwestern.com/real-estate-investing-trends-2025/
