The report states that the challenge of housing affordability in the country is not only about the number of homes available, but also about the limited supply of starter homes accessible to first-time buyers.
Homes priced under $300,000 generally represent the entry point for first-time buyers and essential workers – and the report says this segment is facing the most intense supply constraints.
At the same time, there is a housing stock that is not being used. Data from the US Census Bureau indicates that almost one in ten homes nationwide is vacant.
New Western president and co-founder Kurt Carlton said the data reflects a shift in the way entry-level housing supply is entering the market.
“What if the real housing crisis is not that we haven’t built enough homes, but that we are letting millions of starter homes disappear?” he said. “Solving today’s housing challenge isn’t just about building more housing. It’s about whether viable housing actually exists at the point of entry. In 2025, small, local, independent investors quietly became the largest suppliers of starter homes in America.
“They’re not building subdivisions – they’re revitalizing existing homes that would otherwise remain underutilized and returning them to productive use. The Great Renovation restores the first rung of the housing ladder.”
Investors dominate the entry-level offering
According to the report, investors accounted for 83.75% of new housing inventory priced under $215,000 and 69.5% of inventory under $250,000.
New construction remains concentrated at higher prices. Just under 11% of new homes built in 2025 were completed in the first-time buyer price range of $261,000 or less.
The report also found that many homes bought by investors (72%) were not listed on the open market because they required significant repairs and were considered unlikely to attract traditional buyers.
Empty stock, local market trends
According to the analysis, there are more than 15 million vacant homes nationwide, and more than 6.7 million occupied homes that require significant repairs.
Investor-driven transactions also generate economic activity linked to the broader housing sector.
The report estimates that purchases and resales associated with renovations by investors generated more than $20.9 billion in listing agent commissions in 2025.
These transactions support activities in various sectors related to real estate, including brokerage, lending, title services and other local businesses.
According to the report, investment activity is outpacing new construction in several major metropolitan areas when it comes to producing entry-level housing.
Examples cited include St. Louis, where investor activity delivered 1,069% more entry-level homes than builders, and Boston, where investors delivered 571% more entry-level homes.
Atlanta and Charlotte also showed significant differences, with investors delivering 296% and 149% more starter homes, respectively.
Impact on home buyers and real estate agents
Starter homes are generally considered an important part of the housing market because they enable first-time buyers to purchase their own home and create movement across higher price levels.
When entry-level inventory is limited, fewer buyers can purchase their own home, which slows activity in the rest of the housing market as existing owners delay sales or postpone upgrades to larger homes.
For real estate agents and brokers, the findings shed light on a growing source of residential inventory that is increasingly shaping entry-level transactions.
Investor-driven renovations often transform distressed or outdated properties into move-in ready homes that can be listed and sold through traditional real estate channels.
As entry-level inventory remains limited in many markets, renovated homes may represent a larger share of homes available for first-time buyers. That dynamic can influence where agents focus their efforts — particularly relationships with local investors who regularly acquire and resell homes.
