Are you confusing Tor with a VPN? With a VPN the IP is a commercial server run by the VPN provider, and there's usually just one hop (you run an encrypted connection between yourself and the VPN provider that all your traffic is routed over, then the VPN provider makes outgoing connections on your behalf). You're relying on the VPN provider's promise to not log customer connections, but if they are honest, all connections seem like they're coming from the VPN provider and aren't traceable beyond that.

With Tor, you connect to a random Tor node (which may be another residential computer), which connects to a node in the middle, which connects to an exit node, which forwards your requests on to their final destination. All connections look like they come from the exit node, which might be someone's residential IP.