Where First-Time Homebuyers Have the Best Shot Of Winning Against Investors

 New Neighbors Bank analysis shows local housing policies are often the determining factor in whether individual buyers have the leg up on investors

• Roughly 70% of starter-home purchases across 30 markets analyzed are purchased by individuals, most of whom are first-time buyers
• High-priced cities like Denver, Seattle and Los Angeles are favorable for first-time buyers
• Miami, Atlanta and Nashville remain investor strongholds

COLUMBIA, Mo., Nov. 20, 2025 /PRNewswire/ -- Although investors have steadily increased their share of home purchases in recent years, new data from Neighbors Bank released today shows that individual buyers are holding their own, capturing 69% of starter-home purchases across 30 U.S. metros with sizable investor ownership. The report, First-Time Buyers Are Holding Their Ground Against Investors, found that housing policy rather than market size is the linchpin when it comes to determining buyer outcomes.

The report examines 10 cities with notable investor presence, comparing them to small- and mid-sized cities within the same states, providing insight where first-time buyers might have less competition. The analysis, which was based on 2024 home sales data, found individual buyers outpaced investors in 25 out of the 30 markets, often by wide margins.

Of the 30 metros, the study found that first-time buyers accounted for an average of 69% of starter home purchases. The best markets for first-time homebuyers included large markets, such as Seattle and Los Angeles as well as smaller cities like Indianapolis and Dayton, Ohio. This was also the case for investor-friendly markets with non-owner occupants capturing more than 40% of the starter-home market in both Miami and Oklahoma City.

"Affordability doesn't exist in a vacuum," said Jake Vehige, president of mortgage lending at Neighbors Bank. "Two cities with similar home prices can have completely different outcomes depending on how they regulate investor activity and protect owner-occupants."

For the purposes of the analysis, Neighbors Bank defined a "starter home" as a property affordable to a first-time buyer, with total monthly housing costs at or below 30% of the area's median household income. Purchases intended as a primary residence with a down payment of less than 10% were counted as first-time homebuyer transactions, while non-owner-occupied or secondary residences are considered investor purchases. Only homes within the affordability range for first-time buyers were included, providing a realistic view of entry-level market competition.

Where First-Time Buyers Are Winning
Based on Neighbors Bank's criteria, the top five cities where first-time buyers are winning the largest share of starter home purchases — Denver, Seattle, Los Angeles, Indianapolis and Dayton — all have housing regulations that favor owner-occupancy.

• In Denver, first-time buyers captured 84.3% of home purchases, thanks in part to the city's short-term rental laws that restrict listings to owner-occupied properties, dramatically reducing investor competition and preserving affordable options.
• Seattle's limits on short-term rental units and strong tenant protections allow first-time buyers to capture 81.2% of starter-home purchases.
• Statewide legislation, including SB 1079, and Los Angeles' Home-Sharing Ordinance, empower tenants, nonprofits and first-time buyers to match investor bids, helping first-time buyers secure 80.6% of starter-home purchases in LA.
• In Indianapolis, local initiatives like Vacant to Vibrant and the Renew Land Bank prioritize selling vacant properties to owner-occupants, helping first-time buyers secure 78.2% of starter-home purchases.
• By enforcing five-year owner-occupancy through the Welcome Home Ohio program, Dayton enables first-time buyers to claim 75.2% of starter-home purchases.

Where Investors Still Have the Upper Hand
Although first-time buyers have purchased three-quarters of the starter homes in the 30 markets analyzed, Miami, Atlanta, Nashville, Cleveland and Oklahoma City rank as the top five investor-friendly markets due to permissive rental rules and high profit potential.

• Florida's ban on local short-term rental restrictions and rent control has made Miami a national hotspot for investor ownership, with investors purchasing 56.9% of starter homes.
• Minimal restrictions on rental conversions and rapid population growth have fueled investor activity in Atlanta, allowing investors to capture 44.9% of starter-home purchases.
• In Nashville, state laws protecting non-owner-occupied short-term rentals keep the door wide open for investors, who purchased 44.3% of starter homes.
• Although investors held a 45.1% share of starter home purchases, Cleveland's Residents First housing ordinance, with rental registration and safety requirements, may soon shift the market in favor of first-time buyers.
• In Oklahoma City, simple short-term rental licensing and a ban on rent control maintain investor-friendly conditions, resulting in investors purchasing 41.9% of starter homes.

"First-time buyers can absolutely compete," Vehige said. "But the rules of the market matter. Cities that protect affordable ownership opportunities see stronger first-time buyer outcomes. It's that plain and simple."

To read the full report, including the complete methodology, visit: https://neighborsbank.com/learn/investors-vs-first-time-homebuyers/

About Neighbors Bank
Founded in Clarence, Missouri, and with additional offices in Columbia, Missouri, Neighbors Bank financed more than $675 million in loans in 2024 and is the No.3 USDA lender in the nation, according to the 2025 United States Department of Agriculture rankings. The company's vision is to make homebuying affordable, accessible and achievable.

NeighborsBank.com | 800-220-0600 | 3621 Discovery Parkway, Suite 115, Columbia, MO
65201. Member FDIC. NMLS #491986 (nmlsconsumeraccess.org) Equal Housing Lender.

Media Contact:
Janice McDill
312-307-3134

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SOURCE Neighbors Bank