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For the past several years, venture capital–backed investment behemoths and mom and pop newbies alike have poured money into real estate. With mortgage interest rates at historically low levels and stimulus cash sloshing through the economy, real estate investment went from vigorous to full-on feverish. And along the way, investors—many of whom came to the party with all-cash offers—fully changed the face of many markets, sometimes locking out first-time homebuyers.

However, many of those investors, especially smaller ones, have recently slammed the brakes on their purchases as the housing market has shifted.

The market conditions that made the foray into real estate investment such a sexy proposition have in large part begun to dry up as mortgage rates have soared—and the large hikes in rental prices are beginning to slow.

In some parts of the country where investors competed directly with first-time and other buyers, often winning the bidding wars, investors have been beating a hasty retreat. So Realtor.com® dug into the data to figure out where investor home purchases have fallen the most. Buyers might have a stronger shot at purchasing homes where they hope to live in these markets if they’re not competing with as many cash-flush competitors.

Note: We looked only at sales of investment properties that were purchased using mortgages, which, according to Daren Blomquist, is where you’ll find more of the beginner investors. These homes are generally flipped or rented out.

“Established investors who have more capital reserves would be more likely to buy with cash,” says Blomquist, the vice president of market economics at Auction.com, a website that specializes in foreclosure listings.

Rising home values of the past several years pushed many of these investor buyers out of the premier, coastal real estate markets and into smaller cities, says Matthew Gardner, the chief economist for Seattle-based Windermere Real Estate. They include places like Boise, ID, where home prices were traditionally more affordable than urban hubs such as New York City, Boston, Chicago, and San Francisco.

However, those places where investors flooded into are now the places where investors are pulling back the most.

“The geography has started to shift,” says Gardner. “Investors are going to be looking at markets that are cheaper.”

Nationally, the portion of investors using a mortgage to buy a rental property or a home to flip is at a three-year low as of October, according to seasonally adjusted data from Optimal Blue, a mortgage data clearinghouse. Fewer than 1 in 17 mortgages is being used for an investment purchase, down from around 1 in 12 a little less than a year ago.

Many smaller, mom and pop investors who don’t have the mountains of cash of the institutional investors—aka the big banks, hedge funds, and other large financial companies—usually buy homes with mortgages. Some of these homes are then used as rentals, which can be highly profitable in places where home costs are low but rents are high and rising. Or they purchase properties that need work, hold onto them for only a few months (while paying the mortgage and the costs of required repairs, updates, or upgrades), then sell them for a hefty profit.

But it’s harder to make the numbers work in today’s cost-squeezed market.

For example, an investor buyer who was looking at borrowing $400,000 to buy a rental property last year with a 3.5{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} mortgage rate on a 30-year fixed-rate loan, would need to earn about $1,800 a month to cover the investment.

If that same hypothetical investor is looking at borrowing $400,000 with today’s roughly 7{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} mortgage rate, it will take around $2,700 to cover the monthly payment. In many places, renters simply can’t afford that $900 rent hike, so the investment no longer makes sense.

“Investors will jump back in when things change,” Gardner says, meaning some combination of lower borrowing costs, significant price reductions, or the capacity of renters to cover much higher leases.

So where have investor buyers pulled back the most? To figure it out, we looked at Optimal Blue mortgage data for the 100 largest metropolitan areas. Then we identified the places where investor purchases, as a share of all mortgage-financed purchases, have dropped the most, year over year, since their post-pandemic peak.

To add context, cash-purchase data from ATTOM Data Solutions, another real estate data provider, was included for metro areas where it was available. And we included only the single metro area with the largest drop for any state, to ensure geographical diversity. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

Median home list price: $750,000*

Investors have backed off of their real estate purchases in the Emerald City as their purchases just aren’t penciling out the way they did earlier. Roughly 1 in 30 mortgages in the metro area is now for investment properties, compared to 1 in 20 about a year ago.

“In markets like Seattle, which have gotten so expensive, where buyers are paying $800,000 to $900,000, the rent required to cover that is going to be $6,000 or $7,000 per month,” says Gardner, of Windermere Real Estate.

For a potential landlord, the prospect of finding a renter who can pay that kind of money every month is increasingly slim. Nonetheless, cash purchases in Seattle have held steady for about the past year, at around 20{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of all sales.

For those still looking to jump into the market, this two-bedroom, one-bathroom fixer-upper is being advertised to handy investors at just $425,000.

Median home list price: $323,175

In Cincinnati, the portion of homes being bought by investors with mortgages surged before the COVID-19 pandemic, making up about 1 in 11 mortgages. But in 2022, they dropped to about 1 in 20.

Charles Tassell, the chief operating officer at the National Real Estate Investors Association, who is based in Cincinnati, says he watched as property values in the area appreciated rapidly in the late 2010s, which, combined with low interest rate mortgages, attracted boatloads of investors.

In Deer Park, OH, a suburb where Tassell lived for several years, homes used to sell for $60,000 to $130,000 in the 2000s. In the past few years, however, their price tags have shot up to the $150,000 to $250,000 range.

With higher prices and mortgage rates, deals for investors have come with slimmer and slimmer margins.

“Until [prices] come down a little bit, [we’re] not going to see the investors jump back in strongly,” Tassell says.

Median home list price: $539,900

Boise has been at the top of hot real estate market lists for the past couple of years, with soaring demand and real estate values to match. Many buyers flocked to the city during the pandemic, especially those hailing from California in search of cheaper real estate and a lower cost of living. Builders, home flippers, and landlords jumped in with both feet.

However, the real estate market in Boise has since cooled. More new construction and more homes sitting longer on the market have given local inventory a boost. At the same time, there are fewer buyers in the market. So prices dipped nearly 2{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in October from September. And prices rose just under 2{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} year over year in October. Those aren’t the kinds of numbers investors want to see.

By late 2020, 1 in every 7 mortgages was taken out by an investor. Most recently, the portion of mortgages going to investors matched the national figure of 5.7{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in October.

Median home list price: $620,000

Home prices in the Mile High City have steadily increased through the 2010s. That gave many local investors a sense of stability as they bought up properties they assumed would continue to go up in value.

But that changed at the beginning of 2022, as the market began to turn. Investor activity dropped as the wild price growth of the past few years came to an abrupt halt. The percentage of sellers cutting prices shot up about 189{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} year over year in October.

Some Denver listings, especially those with a price below the metro’s average, still are advertised as investor opportunities, like this midcentury, four-bedroom home in the southwest part of the city.

Median home list price: $405,000

Minneapolis is typically known for its shimmering lakes and having the largest mall in America—not for its real estate investors. But the portion of cash buyers, many of whom are flippers and landlords, has been rising since the coronavirus pandemic began.

And there are plenty of listings squarely aimed at investors. Take this four-bedroom home that’s almost 100 years old. It “needs a lot of work,” the listing explains, and is “suited best for investor.” The property is listed for $250,000, or about 40{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} below the median price per square foot in Minneapolis.

On the other end of the spectrum, this 6,600-square-foot, multifamily property is listed for $725,000, which is about 8{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} above Minneapolis’ median price per square foot. The listing boasts a new roof, siding, and appliances, and makes it clear who it’s aimed at: “Good cash flow investment property.”

Median home list price: $449,000

About an hour west of Boston, Worcester is the second-largest city in New England, and it became a hotbed for investor activity in the past few years, says Nick McNeil, the owner and broker of McNeil Real Estate in Worcester. But as the pandemic-era real estate surge has faded, so has investor interest.

Investment mortgages have now dropped to the lowest percentage on the list (tied with Louisville, KY, No. 9), at only 1 in every 32 mortgages.

“Investors have moved on. They’re not interested in Worcester anymore,” McNeil says. “Prices have gone too high.”

The area became a huge draw, he says, for investors coming from Boston with lots of cash or equity, looking to take advantage of the area’s relatively affordable housing stock. Now, McNeil says, investors are looking farther west and south, to smaller nearby cities where the same dynamic has yet to play out.

Median home list price: $320,000

Oklahoma City has been hot for investors for years, largely due to its more affordable home prices. The portion of mortgages going to investors there has ramped up for the past five years, hitting a high point of 1 in 7. But that number has receded significantly since.

Home prices have surged in the metropolitan area, rising 16.5{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} year over year in October. That slashes deeply into investors’ profits.

This three-bedroom home in a suburb north of downtown is offered with seller financing, which means the buyer could potentially save with a lower mortgage rate. It’s advertised as “a great opportunity for an investor or an owner who likes a project.”

Median home list price: $219,900

Like many of the places on the list, the attractive home prices and ready inventory of Steel City attracted tons of investors during the pandemic. Home flippers flocked to the neighborhoods of Lawrenceville, East Liberty, and Garfield, boosting prices in these communities.

At its height, as many as 1 in every 14 mortgages went to an investor. In October, the figure was only 1 in 27.

The area is still seeing cash buyers make around one-third of purchases.

And there are still plenty of listings that offer shoppers an “investment” property, like this large three-bedroom home with garage space for four vehicles. It sits on more than an acre and is listed for just under $200,000. It’s described as “calling all investors.”

Median home list price: $299,900

Louisville, known for being the birthplace of Muhammad Ali and Kentucky Fried Chicken, has long been popular with investors due to its lower home prices and cost of living. At the height of the pandemic, as many as 1 in every 14 mortgages was for an investor buyer.

But prices have fast been rising in the metro, going up about 15.6{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} year over year in October. That’s led investor mortgages to fall to 1 in every 32.

For keen investors, there are still some investment deals to be had in the home of the Kentucky Derby, though. There is this historic 10,000-square-foot multifamily building near downtown Louisville. It needs some renovation, to be sure, and it’s listed for a cool million dollars. But the listing minces no words by starting its property description with this declaration: “INVESTMENT OPPORTUNITY!!!”

Median home list price: $449,999

Most people know that Texas offers a combo of low taxes and relatively affordable homes, says Debbie Murray, a real estate broker at Allie Beth Allman & Associates in Dallas. This explains much of the rush to Dallas in recent years.

But where it was possible to find a spacious single-family home for around $250,000 just a few years ago, she says, the entry point for the same home is now closer to $450,000.

“We are a declining market for investors,” she says, because they want to find a good deal, one that ensures a healthy return, and that’s harder and harder to find now.

Where 1 in every 13 mortgages went to an investor in late 2021, by mid-2022 only 1 in every 25 to 30 mortgages went to an investor buyer.

Like many of the places on the list, Murray says, Dallas had offered investors a relatively cheap way to buy, then fix up a home to rent it out or sell it again at a profit. But with appreciation and high interest rates, it’s just not the same opportunity it was even a year ago.

“If they’re not a cash buyer,” she says, “they’ve probably been priced out of the market.”

* Median metro home list price in October using Realtor.com data