Home values keep rising (and consistently do over time), making real estate investing a popular endeavor. And it's gaining momentum.
In addition to the allure of potential profits, residential property investment is a choose-your-own-adventure where you can decide between short- or long-term rentals, go bigger with multifamily properties, or flip fixer-uppers. And because so much of real estate hinges on location, where you invest matters just as much as how you invest.
Snapshot of the Residential Investment Market
After historically low interest rates fueled 2021’s banner year, purchase originations for investment properties stabilized. They then climbed 15.7% from 2023 to 2025, according to the most recent Home Mortgage Disclosure Act (HMDA) data.
| Year | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Investment Purchase Originations | 279,177 | 415,992 | 387,678 | 286,701 | 317,204 | 331,844 |
| Originations YoY% | -8.30% | 49.01% | -6.81% | -26.05% | 10.64% | 4.62% |
| Median Loan Amount | $155,000 | $195,000 | $215,000 | $205,000 | $225,000 | $235,000 |
| Median Property Value | $225,000 | $275,000 | $315,000 | $315,000 | $335,000 | $345,000 |
| Median Applicant Income | $138,000 | $146,000 | $152,000 | $165,000 | $172,000 | $166,000 |
Some other noteworthy facts uncovered by analyzing last year’s HMDA data:
- Investors are focusing on more affordable properties: The median investment property value in 2025 was $345,000. When looking at all residential purchases for the year, that number jumps to $375,000. This difference likely contributes to better cash flow for rentals and higher margins for flips.
- Despite increasing home values, investor LTV ratios have stayed relatively constant: Since 2020, the median investment property value has risen more than 53%. However, comparing median property values and loan amounts over this period reveals that LTV ratios haven’t really changed. They’ve largely remained between 65% and 70%, though this figure did peak at 70.9% in 2021.
- Investor income remains significantly higher than the typical homebuyer: In 2025, the median applicant income for investment loans was $166,000. When comparing all homebuyers, that figure drops to $116,000 – a $ 50,000-per-year difference.
Investment Properties by State
To see which states had the highest ratios and volumes of investor-owned homes, Mortgage Research Network analyzed the latest HMDA data and found that 3,929 lenders originated 331,844 residential investment property loans in 2025. This set of mortgages had a median loan amount of $235,000; a median property value of $345,000; and a median borrower income of $166,000.
Hawaii led the way in the ratio of investment originations to overall originations. Last year, investment properties accounted for 16.7% of the Aloha State's purchase mortgages. The next highest shares belonged to:
Arkansas – 14.8%
Oklahoma – 14.5%
New Jersey – 13.0%
Missouri – 12.1%
On the other end of the spectrum, the states with the lowest shares of investment mortgages were:
Alaska – 5.2%
New Mexico – 5.3%
Minnesota – 6.1%
Colorado – 6.3%
Washington – 6.4%
By volume, Florida's 31,578 investment purchase originations took the crown, just beating 30,691 in Texas and 28,105 in California. North Carolina (13,938) and Pennsylvania (13,492) rounded out the top five. Together, these five states accounted for 35.5% of the country's investment originations in 2025. At the opposite end of the spectrum, the lowest-volume states were mostly sparsely populated:
Alaska – 390
Vermont – 508
Wyoming – 534
North Dakota – 700
South Dakota – 749
Idaho experienced the largest year-over-year gain in investment property loan volume, jumping 29.2% from 2024 to 2025. Three other states also cleared the 20% growth threshold:
Oregon – 23.9%
Utah – 22.8%
Vermont – 22.7%
Conversely, six states posted annual declines. Nevada fell furthest at 8.6%, below decreases of 4.8% in Georgia and 3.9% in Texas.
| State Name | Investment Property Purchase Loans | 2025 Investment Property Volume Rank | Investment Property Share of Purchase Originations | 2025 Investment Property Share Rank | Investment Purchase Originations YoY |
|---|---|---|---|---|---|
| Florida | 31,578 | 1 | 10.82% | 10 | 1.40% |
| Texas | 30,691 | 2 | 8.64% | 26 | -3.90% |
| California | 28,105 | 3 | 11.00% | 9 | 6.80% |
| North Carolina | 13,938 | 4 | 9.33% | 22 | 0.70% |
| Pennsylvania | 13,492 | 5 | 11.00% | 8 | 8.00% |
| New York | 13,249 | 6 | 11.15% | 6 | 12.50% |
| Ohio | 12,898 | 7 | 9.75% | 17 | 9.30% |
| Georgia | 12,293 | 8 | 9.53% | 19 | -4.80% |
| Illinois | 11,801 | 9 | 9.44% | 20 | 11.40% |
| New Jersey | 10,465 | 10 | 13.02% | 4 | 13.00% |
| Missouri | 9,541 | 11 | 12.08% | 5 | 1.20% |
| Tennessee | 9,189 | 12 | 10.09% | 12 | -1.00% |
| Virginia | 8,082 | 13 | 7.84% | 33 | 7.40% |
| Michigan | 7,006 | 14 | 6.55% | 44 | 5.40% |
| Oklahoma | 6,822 | 15 | 14.50% | 3 | 2.20% |
| Arizona | 6,695 | 16 | 7.06% | 40 | 15.20% |
| Indiana | 6,311 | 17 | 7.22% | 39 | 3.30% |
| Massachusetts | 6,065 | 18 | 9.76% | 16 | 12.00% |
| Alabama | 5,913 | 19 | 9.34% | 21 | 1.60% |
| South Carolina | 5,912 | 20 | 6.94% | 41 | 6.90% |
| Arkansas | 5,664 | 21 | 14.80% | 2 | 5.90% |
| Maryland | 5,481 | 22 | 8.62% | 27 | -1.70% |
| Washington | 5,441 | 23 | 6.36% | 47 | 1.30% |
| Wisconsin | 5,340 | 24 | 8.12% | 31 | 9.60% |
| Colorado | 5,135 | 25 | 6.31% | 48 | 3.60% |
| Kentucky | 4,714 | 26 | 9.19% | 23 | 2.90% |
| Minnesota | 4,203 | 27 | 6.13% | 49 | 0.70% |
| Louisiana | 4,022 | 28 | 9.82% | 15 | 5.40% |
| Nevada | 3,846 | 29 | 9.99% | 13 | -8.60% |
| Iowa | 3,727 | 30 | 9.03% | 24 | 5.90% |
| Kansas | 3,624 | 31 | 11.01% | 7 | 10.20% |
| Connecticut | 3,396 | 32 | 9.58% | 18 | 12.50% |
| Utah | 3,050 | 33 | 6.90% | 42 | 22.80% |
| Mississippi | 3,043 | 34 | 10.19% | 11 | 6.10% |
| Oregon | 2,815 | 35 | 6.44% | 45 | 23.90% |
| Nebraska | 2,404 | 36 | 9.95% | 14 | 6.90% |
| Idaho | 2,118 | 37 | 7.26% | 38 | 29.20% |
| Hawaii | 1,651 | 38 | 16.67% | 1 | 18.10% |
| West Virginia | 1,383 | 39 | 8.12% | 30 | 10.50% |
| New Mexico | 1,194 | 40 | 5.26% | 50 | 7.20% |
| Maine | 1,111 | 41 | 6.85% | 43 | -1.30% |
| Delaware | 1,091 | 42 | 7.76% | 34 | 8.90% |
| Montana | 987 | 43 | 8.46% | 29 | 5.40% |
| New Hampshire | 966 | 44 | 6.38% | 46 | 15.30% |
| Rhode Island | 793 | 45 | 7.57% | 36 | 0.50% |
| South Dakota | 749 | 46 | 7.68% | 35 | 0.00% |
| North Dakota | 700 | 47 | 8.50% | 28 | 14.40% |
| Wyoming | 534 | 48 | 7.32% | 37 | 13.10% |
| Vermont | 508 | 49 | 7.97% | 32 | 22.70% |
| District of Columbia | 489 | 50 | 9.02% | 25 | 2.90% |
| Alaska | 390 | 51 | 5.18% | 51 | 13.40% |
Cash Flow vs Appreciation: Which Investor Are You?
When it comes to real estate investing, there are generally two schools of thought: cash flow or appreciation.
Cash flow investors more typically deploy their capital in low-cost places. States like Arkansas, Oklahoma, and Missouri made the top 5 by investor share of originations and have property values below the national mean. This appeals to cash-flow-first investment strategies since lower home prices equal lower barriers to entry and the potential for higher return margins sooner. Additionally, rent-to-price ratios in these markets can outperform coastal alternatives even with modest appreciation.
Investors in high-cost-of-living areas generally play the long game. In states like California, New York, and New Jersey (all in the top-10), investors tolerate tighter cash flow in exchange for wealth-building potential. They may even operate at a loss in the short-term, in hopes of selling at a much higher price down the line, relying on strong, sustained demand fueling steady appreciation over time. These markets also tend to favor experienced investors who can navigate stricter lending environments and higher carrying costs.
The path you take depends on your investment goals, financial profile, and risk tolerance.
Finding The Right Lender
Whether you’re an experienced real estate investor or a first-time homebuyer, the right lender should help identify the best financing programs and loan types for your situation.
Shopping for lenders with expertise in residential investment mortgages can be beneficial since their background may provide deeper knowledge around specific underwriting rules and market conditions in your area.
When you’re ready, reach out to a local lender and get the process started.
All figures based on 2025 Home Mortgage Disclosure Act (HMDA) data provided by the Consumer Financial Protection Bureau (CFPB) and accessed May 6, 2026, through PolygonResearch.com HMDAVision.
