President Donald Trump announced on Wednesday that he intends to implement measures aimed at preventing institutional investors from purchasing single-family homes, asserting that this step would enhance housing affordability for American citizens. In a social media post, Mr. Trump stated that the aspiration of homeownership has become increasingly unattainable for many Americans, and that decisive action is required to facilitate greater access to this milestone. “I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it,” Mr. Trump wrote. “People live in homes, not corporations.” He further indicated that he would provide additional details regarding the proposal at the World Economic Forum in Davos, Switzerland, later this month. The White House declined to offer further information concerning Mr. Trump’s plan to restrict the acquisition of homes by large investors. The stock prices of several major home leasing and management companies experienced a significant decline immediately following Mr. Trump’s announcement. Shares of Invitation Homes dropped by over 7%, while American Homes 4 Rent decreased by 6.3%. Investment giant Blackstone, which also engages in leasing and renting properties, saw its stock price decline by more than 4%. Jaret Seiberg, an analyst with TD Cowen, commented on the situation, stating, “It is an idea that appeals to MAGA populists and is a policy that Vice President J.D. Vance has consistently supported.” Seiberg predicted that both the House and Senate would likely pass bipartisan legislation to enact Mr. Trump’s order. “We appreciate that many important congressional Republicans have opposed this in the past. Our view is that they will concede on this issue rather than fight the president,” he added. Institutional investors account for approximately 1% of the total single-family housing stock, according to an August analysis conducted by researchers at the American Enterprise Institute, a nonpartisan think tank. The study defined such investors as those owning at least 100 properties. The analysis also noted that institutional ownership varies across the country, reaching 4.2% in Atlanta, 2.6% in Dallas, and 2.2% in Houston. However, these investors typically do not dominate neighborhoods, even if they tend to be more concentrated in lower- and middle-income communities. The Impact on Home Prices and Rent Recent increases in the activity of institutional investors purchasing single-family homes can have negative consequences for consumers, research indicates. In 2024, a Government Accountability Office report found that institutional investment can drive up rents and home prices, particularly in regions with high concentrations of investor-owned properties. Advocates for policies benefiting property owners expressed their support for measures that would block large investors from acquiring properties. “We are very glad to see that the administration is squarely focusing on housing and housing affordability,” Colin Allen, executive director of the American Property Owners Alliance, a nonpartisan advocacy group, told CBS News. “Each home that is taken off the market by an institutional investor is one less for an owner-occupant to try to move into at a time when there is a lot of competition for homes for sale.” More than 75% of homes across the U.S. are currently considered unaffordable for most Americans, according to Bankrate, a personal finance site. Data from the National Association of Realtors showed that only 24% of home purchases in 2024 were made by first-time homebuyers, down from 50% in 2010. Housing economists also point to a significant shortage of housing inventory and rising home costs in recent years. Goldman Sachs analysts estimated in October that the U.S. would need to add 3 million to 4 million homes above the normal pace of construction levels to help ease residential real estate prices. A More Effective Solution? Some experts express skepticism regarding the efficacy of Mr. Trump’s proposal to restrict investor ownership of single-family homes in alleviating housing costs for Americans. Institutional investors contribute to the housing supply by purchasing and renovating dilapidated homes, and then making them available for sale. Edward Pinto, senior fellow and co-director of the AEI Housing Center, stated, “A ban on real estate trusts, private equity firms, and other housing market investors from buying homes could also have unintended consequences by discouraging such players from selling their existing properties.” Pinto suggested that a more effective way to create affordable housing is to improve the utilization of the nation’s existing housing stock by allowing homeowners to rent out unused rooms tax-free, and by incentivizing states to construct more homes.
