Affordable housing is in demand in Dallas-Fort Worth, as well as in most major markets in the U.S, especially for first-time buyers. But in this competitive market, other buyers aren’t the ones they’re competing with for good deals — it’s investors, according to the Dallas Morning News.

The homeownership rate is near its lowest level in 50 years. Meanwhile, the number of homes being purchased by investors is at 33 percent, one of the highest rates in many years. As a result, first-time home buyers are increasingly being frozen out of competitive real estate markets like Dallas and Denver. 

Investors are snatching up homes in the “starter home” category, defined as single-family homes with 1,000 to 2,000 square feet. Most are small investors who are seeking a second income or “nest egg,” owning less than five properties. Large companies that own hundreds of properties have a comparatively smaller share of the market.

The supply of homes is at its lowest level in 30 years, which already makes the market more competitive. Here in Dallas-Fort Worth, fewer than 3,000 houses are listed for sale at a price below the area median of $240,000. Most new houses being built in Dallas-Fort Worth are in the luxury category. That’s bad news for first-time buyers who are looking for something more affordable. 

Investors have the edge over first-time homebuyers since most investors can pay cash for a house, while homebuyers often require financing.

The combination of more investor-owned properties and a diminishing supply of affordable houses means that potential homeowners will instead be renters.