SALT LAKE CITY — Yes, investors have played a significant part in fueling the red hot U.S. housing market and driving home prices up to record highs during the pandemic housing frenzy.

That's according to a recent report by Harvard University's Joint Center for Housing Studies, which found investors have been snatching up "a record share" of single-family homes — with a spike in investor purchasing that began soon after COVID-19 hit the U.S.

"Adding to the pressure on prices, investors moved aggressively into the single-family market over the past year, buying up moderately priced homes either to convert to rental or upgrade for resale," the Harvard report states.

How many homes have investors bought?

Of U.S. homes sold in the first quarter of 2022, 28% were purchased by investors, according to Harvard researchers' analysis of CoreLogic data.

That's up from 19% a year earlier and "well above" the 16% average investor share from 2017 to 2019.

Know that not all investors come from the same cloth. They range from big, company-backed investors to everyday Americans stepping into the rental or real estate business. A majority of this activity was driven by small to midsize investors, but a significant percentage was indeed driven by the big boys, according to the Harvard report.

Investors with large portfolios of at least 100 properties "drove much of this growth, nearly doubling their share of investor purchases" from 14% in September 2020 to 26% in September 2021, the report states.

Who are these big investors?

"Some are massive rental companies like Invitation Homes — the nation's largest owner of single-family rental homes — which grew its portfolio during the pandemic," Fortune reported. "Blackstone, which founded Invitation Homes back in 2012, also got back into the single-family home business during the pandemic" after it had sold most of its shares in 2019.

Online iBuyers, or real estate instant buyers, also swooped into the market, Fortune noted. Companies like Opendoor, Offerpad, RedfinNow, and Zillow Offers also made instant cash offers to sellers, then turned around to flip them to make profits off of service fees charged to the buyer.

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But there are many — many — more investors that you've likely never heard of, Fortune notes, citing a recent Freddie Mac report. That report drew a more moderate conclusion at just how much of an impact investors have had on the market, noting investor shares were only "slightly up" at the end of 2021 (however, as Fortune noted, its analysis doesn't fully capture all-cash transactions).

"While large corporate investors are rapidly rising as a share of the market and are likely to expand, they remain so small that their market share only has a modest impact on the overall percentage of investors," the Freddie Mac report states.

But it's also worth noting, Freddie Mac researchers wrote, that both big and small investors "heavily target under-market-value homes that need more repair than what most first-time homebuyers are willing to invest."

Does this mean there's a housing bubble?

Even though investors helped drive up prices — and fuel "exuberance" in the market — the U.S. housing market has also been largely driven by real, organic demand by house-hungry Americans.

Although home prices are starting to level off from a record surge in 2021 — as rising mortgage rates begin to strangle the market and price many Americans out of buying homes — both home prices and rental rates are "still rising because of the severe constraints on supply," the report states.

The U.S. remains in the midst of a housing shortage. Inventory of existing homes for sale hit a new low of 850,000 units in January before bumping up to 1 million units in April. However, that's still down 10% from last year, according to the Harvard report.

Investor activity, meanwhile, compounds the supply issue.

"By buying up single-family homes, investors have reduced the already limited supply available to potential owner-occupants, particularly first-time and moderate-income buyers," Harvard researchers wrote.

Plus, investors are "more likely to target lower-priced properties," the report adds. In September 2021, investors bought 29% of homes sold that were in the bottom third of metro-area sales prices, compared with 23% of homes sold in the top third. And typically, once bought by an investor, those homes are often converted to rentals or are flipped at a higher price tag.

Where did investors buy up the most homes?

Naturally, investors saw dollar signs in high-demand, fast-growing, desirable locations where prices were rising the fastest — big cities in the South and, yes, the West.

"Not surprisingly, investors focused on markets with rapid home price appreciation," the report states. That led to "especially high" shares of investor sales in Atlanta (41%), San Jose (38%), Phoenix (36%) and Los Angeles (34%) at the end of 2021.

That finding is supported, Fortune notes, by a separate Redfin analysis, which looked at all home sales, not just single-family home sales.

Atlanta still leads with the largest share of homes bought by investors in the first quarter of 2022, with 33.1%, according to Redfin. Jacksonville is close behind, with 32.3%, followed by Charlotte, North Carolina with 32.2%, Phoenix with 29% and Miami with 28.2%.

Those same markets are also among the nation's most "overvalued" housing markets that are at risk of seeing a home price decline," Fortune reported, pointing to an analysis by Moody's Analytics that has gauged regional housing markets at the most risk of seeing home prices decline up to 20% if a recession hits.

Investor activity spiked everywhere

It's also worth noting that even though markets in the West and the South have seen the largest shares of investor activity, "almost every major U.S. housing market saw an uptick," Fortune reported.

And even though Redfin notes investor home purchases fell in the first quarter of 2022, their share of the market has hit a record high.

"Investors bought up a larger share of America's homes than ever before" in the first quarter of 2022, according to Redfin, noting investors purchased a record 20% of homes that sold, up from 15.3% a year ago. "A decrease in overall home purchases nationwide allowed investors to increase their market share even while purchasing fewer homes."

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