Big investors are gradually stepping away from many housing markets, as distressed homes start to dry up. But another type of investor is stepping in to fill their shoes. The number of home sales to investors rose in October, but a closer look at many markets shows a different investor picture forming.

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"We've seen buying activity slowing down among the largest institutional investors, and some of this activity [is being] replaced by mid-sized companies and individuals looking to buy and rent out single-family homes," Rick Sharga, executive vice president of Auction.com, told CNBC. "The asset class seems likely to continue to grow, but the share of inventory purchased by the largest funds appears to be shrinking."

Big institutional investors have a large backlog of homes already on their books to renovate and rent, which is eating away at their profits until they can get these homes onto the market. As such, smaller investors are stepping in to buy some of these properties from the bigger investors to manage in their own portfolios, CNBC reports. 

Source: CNBC