Local Investors Outpace Builders by 217% in Delivering Starter Homes to Market as Affordable Housing Shortage Deepens

"The Great Renovation" is quietly rehabilitating the first rung of the housing ladder across America

DALLAS, March 10, 2026 /PRNewswire/ -- New Western, the leading real estate investment marketplace and largest home buyer in the nation, today released its 2026 Annual Flip Side Report: Residential Real Estate Investing Trends, revealing a structural shift in how affordable housing is being supplied in America.

The report, titled "The Great Renovation: How Starter Homes Are Being Supplied Again," finds that in 2025, local independent investors delivered 216.9% more entry-level homes than builders, emerging as the primary source of new inventory in the nation's most constrained price segment.

At a time when housing affordability dominates national headlines, the report argues the crisis is not simply a shortage of housing units but a shortage of usable, attainable homes at the base of the housing ladder.

The most critically needed housing in the market is the starter home. Homes under $300K represent the entry point for first-time buyers and essential workers and are the segment where affordability pressure is most acute.

Even as affordability tightens, nearly 1 in 10 U.S. homes sits vacant, according to U.S. Census data.

Key Findings from the 2025 Flip Side Report:

• Local investors outpaced builders by 216.9% in supplying homes in the starter segment.
  • Investors delivered 120,193 starter homes.
  • Builders delivered 37,931 starter homes.
• In the most affordable price bands, local, small investors dominate supply:
  • 83.75% of new inventory under $215K
  • 69.5% of new inventory under $250K
• New construction remains concentrated in higher price tiers:
  • Only 10.6% of new builds were delivered in the starter band.
  • Over 89% of new construction occurred above entry-level pricing.
• Investors target housing that most homebuyers will not or cannot purchase. In 2025, more than 72% of revitalized homes were acquired off-market because they were not viable listings in their existing condition. Most required substantial repairs beyond what a typical owner-occupant is willing or able to take on.
• Revitalization strengthens the broader housing economy. In 2025, investor-driven transactions — including both the acquisition of homes from represented sellers and the resale of renovated properties through the retail market — generated over $20.9 billion in listing agent commissions, supporting jobs and activity across brokerage, lending, title, and local services.
• The revitalization pipeline remains vast:
  • 15+ million vacant homes nationwide.
  • 6.7+ million occupied homes in need of significant repair.

A Structural Shift in Housing Supply

The report introduces the concept of "The Great Renovation" a decentralized, grassroots movement in which small, local investors acquire vacant, blighted, or functionally obsolete homes, rehabilitate them, and return them to the market as move-in-ready starter homes.

Unlike new construction, these homes already exist within established neighborhoods and do not require new land development, zoning changes, or extended permitting timelines.

Across major U.S. markets, revitalization-driven supply is consistently outpacing new construction at entry-level price points, including:

• St. Louis: 1,069% more starter home inventory delivered by local investors than builders
• Boston: 571% more starter home inventory from local investors
• Atlanta: 296% more starter home inventory from local investors
• Charlotte: 149% more starter home inventory from local investors

The report emphasizes that starter homes are the lynchpin of the housing ecosystem. When entry-level inventory is constrained, mobility slows across all price tiers, limiting move-up activity and reducing overall market liquidity.

Quote from Kurt Carlton, Co-Founder and President of New Western

"What if the real housing crisis isn't that we haven't built enough homes, but that we're letting millions of starter homes disappear?" said Kurt Carlton, Co-Founder and President of New Western. "Fixing today's housing challenge isn't just about building more homes. It's about whether attainable housing actually exists at the entry point. In 2025, small, local independent investors quietly became the largest suppliers of starter homes in America. They aren't building subdivisions, they're revitalizing existing homes that would otherwise remain underutilized and returning them to productive use. The Great Renovation is restoring the first rung of the housing ladder."

Why It Matters

Housing has long been a cornerstone of middle-class wealth creation and economic mobility. When starter homes disappear, first-time buyers remain renters longer, equity formation slows, and inventory circulation across the housing ladder weakens.

The Flip Side Report argues that revitalization is not a niche activity. It is now foundational supply at the base of the housing market.

Policies that restrict small-scale revitalization risk reducing one of the fastest, most scalable sources of attainable housing. Policies that recognize and support it could meaningfully expand affordable inventory without requiring new land or years-long development cycles.

What appears in the 2026 data will reflect whether this segment is enabled or constrained.

About New Western

New Western is the nation's largest home buyer and a real estate investment marketplace that connects over 250,000 local investors with the largest private source of value-add residential properties in the country. The company buys and sells a home every 13 minutes across major U.S. markets, helping sellers move on quickly while creating new, affordable housing inventory through renovation. New Western has earned multiple Glassdoor Employees' Choice Awards as one of the Best Places to Work in the U.S. Learn more at www.newwestern.com and explore careers at www.newwestern.com/careers.

About the National Association for Housing Revitalization (NAHR)

The National Association for Housing Revitalization (NAHR) is the unified voice of the housing revitalization industry, advancing housing policy, professional standards, and collaboration to return aged, distressed, and vacant homes to the market as attainable housing to strengthen America's housing inventory. Learn more at https://housingrevitalization.org/.

Media Contact
Andrea Merrill, VP of Marketing, New Western
[email protected]

SOURCE New Western