Home prices in the United States increased at the fastest rate on record in 2021. That’s drawn in a flood of investors looking to cash in on the boom.

What’s happening: Investors bought 18.4% of homes sold across the country during the last three months of the year, according to Redfin. That’s an all-time high on records dating back to 2000.

The brokerage tracked purchases from private equity firms, foreign investors, trusts, mom-and pop-investors and “i”-buyers — or companies that use algorithms to spot deals and quickly flip homes.

Behind the rush: Demand for homes has jumped since the pandemic hit, as Americans amassed savings and sought out properties better suited to working from home. Meanwhile, rock-bottom borrowing costs made mortgages more affordable.

At the same time, there have been serious constraints on supply. Inventory of homes dropped to record low levels in December, according to a recent report from the National Association of Realtors.

That’s caused prices to skyrocket. Home prices rose 18.8% in 2021, according to the S&P CoreLogic Case-Shiller US National Home Price Index, which posted Tuesday.

This dynamic is catnip for investors, who have been hunting for more creative ways to generate returns. They shelled out $49.9 billion for homes in the fourth quarter, up from $35 billion one year earlier.

The shortage of housing is what’s driving the affordability crisis, Redfin economist Sheharyar Bokhari told me. But because two-thirds of investors pay with cash, they have a “competitive advantage” over other buyers.

“Investors are not the cause of the affordability issue, but since they are flush with cash, they are more likely to win a home over a regular homebuyer, creating a frustrating experience for those that keep losing offers,” Bokhari said.

Single-family homes accounted for about three in four investor purchases last quarter. Lower-priced homes, which can create more opportunities for investors to turn a profit, were the most popular.

All about location: You’re most likely to be competing against investors if you live in the Sun Belt.

Redfin found that in Atlanta and Charlotte, almost a third of homes sold in the fourth quarter were bought by investors. In Jacksonville, investors made up close to 30% of home sales.

Why? All were below the national median for home sales of $383,000 in December, making them attractive to investors searching for deals.