President Donald Trump moved forward with his efforts to ban large institutional investors from buying single-family homes, telling the World Economic Forum in Davos, Switzerland, he had signed an executive order aimed at stopping Wall Street from the purchases.
“Wall Street has driven up housing prices by buying thousands of homes…a person can't get depreciation on a house but when a corporation buys it, they take depreciation. Homes are built for people, not for corporations," Trump said on Wednesday.
The order, issued on Tuesday before Trump’s Davos speech, tasks the Treasury secretary and the assistant to the president for economic policy to come up with clear definitions of “large institutional investor” and “single-family home” within 30 days.
It also directs executive agencies to scale back programs that help finance institutional investors’ purchases of single-family homes and bars them from selling any federally owned homes to large institutional investors.
“America will not become a nation of renters. That’s why I’ve signed an executive order banning corporations from buying a house [and] asking Congress to pass it,” Trump said.
Institutional investors react to housing ban
In a statement to CoStar News, a spokesperson for Blackstone, one of the world’s largest asset managers in single-family rentals, pushed back: "We believe our current portfolio is poised to continue to perform quite well and operate at the highest standards for residents.”
The spokesperson added that the firm's U.S. home holdings account for 2% of its real estate assets under management and 0.5% of the firm's overall assets. Blackstone has been an overall seller of homes over the past decade, with its holdings down more than one-fifth, according to the statement.
"Our country needs more housing investment, so we look forward to working with the administration and other policymakers to expand rental options and create real pathways to homeownership," a spokesperson from the National Rental Home Council, a trade association representing the single-family rental home industry, told CoStar News in a statement. "We will continue to do our part by preserving existing homes and building new homes to expand the nation’s housing supply."
Trump's plan did carve out an exemption for "build-to-rent" communities, newly constructed neighborhoods of single-family homes designed specifically to be rented rather than sold.
Institutional investors hold a small stake
Institutional investors comprised 15.7% of residential purchases in 2024, according to the latest data from the National Association of Realtors.
The NAR defined institutional investors as any corporations, companies or LLCs that own any single-family home, condominium or townhouse. That percentage decreased from 16.6% in 2023 but remained about the same compared to a decade ago at 15.9% in 2014.
The biggest players in this space consist of the Dallas, Texas-headquartered Invitation Homes and Las Vegas, Nevada-based American Homes 4 Rent. The former manages about 80,000 residences while the latter manages 61,000.
Corporations are heavyweights in some communities, including in Atlanta and Phoenix, where they “have taken over entire neighborhoods in some cases,” said Sharon Cornelissen, director of housing at the Washington, D.C.-based research and advocacy nonprofit Consumer Federation of America.
“In those cases, they are blocking out people's opportunities to buy a home,” Cornelissen said.
Critical to this executive order will be the definition of a corporation, Cornelissen said. In the cases of the biggest institutional players, these companies own thousands of residences across the country.
Trump’s order also directs federal agencies to step up scrutiny of investor home purchases, instructing the Federal Trade Commission to examine whether large institutional buyers have weakened competition in local housing markets.
It goes further still, directing the attorney general and Federal Trade Commission chair to review large investors’ purchases of single-family homes in a step that could subject those acquisitions to antitrust enforcement.
The order also requires the Department of Housing and Urban Development to create a registry of single‑family rental owners who participate in federal housing assistance programs, allowing the agency to track the involvement of major institutional landlords.
Supply could go up, said Alanna McCargo, senior fellow for inclusive capitalism at the Clinton Foundation.
“For first-time buyers to get a first look at a property before an investor can purchase it, I think, can meaningfully mean that we will see more homeownership opportunities.”
Trump, however, signaled his wariness of any approach that risks lowering home values for current owners.
“I am very protective of people that already own a house,” Trump said.
“Every time you make it more and more affordable for somebody to buy a house cheaply, you're actually hurting the value of those houses, obviously, because the one thing works in tandem with the other," he added. "And I don't want to do anything that's going to hurt the value of people that own a house who, for the first time in their lives, are walking around the streets of whatever city they're in very proud that their house is worth" $500,000, $600,000, $700,000.
A ban opens up homebuying options for some, but hurts the renters currently in those homes, said Joseph Gyourko, real estate professor at the University of Pennsylvania Wharton School of Business.
“I don’t think it’ll do much, nor do I think it’s a good policy. Number one, it’s a really small sector of the housing market,” Gyourko said. “Number two, you’ve got to remember rents will go up and you harm renters. One of my bigger problems is this is too small to matter.”
The order leaves several key details unresolved. It offers no immediate plan for implementing the directives. Instead, Trump has instructed the White House team to draft a legislative proposal that would codify the ban through Congress.
This follows Trump's statements this month that government-backed mortgage finance entities would buy $200 billion in mortgage bonds to lower mortgage rates. He is also preparing a plan to let Americans tap their 401(k)s for down payments without penalty, a senior White House official said.
Even with those moves, the administration is still racing to boost housing affordability, a top voter concern in this year’s midterm election.
Further policies to boost housing affordability
Trump is also floating other affordability measures, such as reducing credit card interest rates, to help more Americans save for a home.
Credit card debt weighs heavily on consumers and prevents many from homeownership, Trump said during his speech at Davos. He wants to cap credit card interest rates at 10% for the first year.
Interest rates on credit cards are well above 10%. Cardholders having to carry over their balance every month pay interest based on an annual percentage rate, or APR.
The average APR on accounts has fluctuated year over year but has been trending up, according to data from the Consumer Financial Protection Bureau and the Federal Reserve. It hovered at 22.8% in 2023, up from 20.4% the year prior and 12.9% a decade ago.
"This will help millions of Americans save for a home," Trump said. "They have no idea they're paying 28%. They go out, they're a little late in their payment, and they end up losing their house. It's terrible."
This proposal — just like the executive order to ban institutional investors from snagging single-family homes — must be passed by Congress.
"As the Consumer Federation of America, we’ve spoken out against high credit card fees," Cornelissen said. "Credit card debt is on the rise as people face an affordability crisis. We would like to see a restriction on these fees. It may have to happen through Congress."