Real estate investors accounted for almost one of every three Atlanta home purchases in the fourth quarter last year, the highest share among 40 U.S. cities analyzed in a recent Redfin report. 

In dollar terms, investors purchased $2.86 billion worth of Atlanta residences during the quarter, placing the city fourth on Redfin’s list, with only Los Angeles, Phoenix and New York seeing greater investments. 

Investors increased their purchases by 74.4% year over year, a significant increase and the fifth-greatest gain among metro areas surveyed. Only Jacksonville, Fla.; Las Vegas; Charlotte, N.C.; and Baltimore saw greater increases in investor spending. 

Despite the intensity of investor interest, Atlanta was still relatively affordable. At $280,000, Atlanta ranked 27th by the median price of homes bought by investors, above Providence, R.I., but below Minneapolis. 

Nationwide, investors made 18.4% of all fourth-quarter home purchases, a record level. By amount, investors purchased $49.9 billion worth of homes in the fourth quarter, up from $35 billion a year earlier. The increase came even as the number of homes investors purchased fell 9.1% on a quarterly basis, a sign of the market’s tight inventory and rising prices. 

Today’s market dynamics are clearly favorable to investors, who frequently purchase with cash and aren’t as susceptible to rising interest rates. Surging home prices also keep many prospective homebuyers in the rental market, which in turn makes real estate a more attractive investment. 

“Investors are chasing rising prices because rental payments are also skyrocketing, incentivizing investors who plan to rent out the homes they buy,” Redfin economist Sheharyar Bokhari said. “The supply shortage is also an advantage for landlords, as many people who can’t find a home to buy are forced to rent instead. Plus, investors who ‘flip’ homes see potential to turn a big profit as home prices soar.”