Real estate investors bought 1 in 4 of the nation’s most affordable homes in the second quarter of 2024 as homeownership remains out of reach for many Americans.

Up 3% year-over-year, investor home purchases totaled $43 billion, marking the largest increase since 2022, according to a Redfin report. It’s a sign that investor activity is stabilizing in a market that endured volatility over the past few years. While that’s potentially good news for investors and sellers, soaring prices mean homeownership remains an unachievable goal for many first-time buyers.

“One reason real estate investors are coming out of hibernation is to take advantage of robust demand from renters,” said Redfin Senior Economist Sheharyar Bokhari. “Elevated home prices and mortgage rates have pushed homeownership out of reach for a lot of Americans, which is fueling demand for rentals. Investors, many of whom can afford to pay in cash to avoid the sting of high mortgage rates, are cashing in on that demand.”

The national median cost of buying a house increased 4.9% from a year prior, raising the value of an existing single-family home to about $422,100.

Out-of-reach home prices have created an opportunity for investors, whose home purchases more than doubled during the pandemic and fell nearly 50% last year. Investors bought 1 in 6 of all U.S. homes that sold in the second quarter of this year.

San Jose, California, and Las Vegas, Nevada, saw some of the highest growth in investor home purchases, rising 27% year over year in the second quarter. Sacramento, Los Angeles and San Francisco followed.

As investors buy up housing in the Golden State, California’s homeless population increased as much as 7.5% between 2022 and 2023, according to the Public Policy Institute of California. The state accounts for nearly a third of the homeless population in the U.S., with about 181,000 Californians in need of housing, The Associated Press reported.

Meanwhile, new construction that kept rent stagnant for a time is slowing — an indicator that rent costs may soon be on the rise. The apartment owner Equity Residential agreed to buy 11 apartment complexes for $964 million earlier this month. It’s the biggest U.S. multifamily acquisition by a public real estate investment trust in seven years and just one of many high-profile deals this year, Redfin noted.