During the first four months of 2005, investors accounted for nearly one in 10 mortgages used to buy homes in the U.S., according to a new analysis by LoanPerformance, a unit of First American Corp. that tracks 46 million mortgages monthly and provides information to lenders and other industry participants. The investor share for the period, 9.86%, compares with 8.67% in 2004 and less than 6% in 2001.

The total number of mortgages used to buy investment properties might actually be higher, as these figures don't include mortgages used to buy second homes that might also provide rental income. LoanPerformance says the share of mortgages used to buy second homes has also hit record levels this year, climbing to 7.19% through the end of April from 6.05% in 2004 and just 2.18% in 2001. A study released by the National Association of Realtors in March found that 23% of homes purchased last year were for investment, while an additional 13% were vacation properties.

The common wisdom is that a high demand from real estate investors could drive up speculations in the market and therefore housing price could be propelled to a bubble level. When investors withdraw from the market, in a non-orderly fashion, the housing market will stagnate in the best scenario, or crater in the worst case. Read the full article Investors Buy Homes At a Record Pace .