Trump Proposes Change on Who Can Buy Single-Family Homes: How Could That Affect the Housing Market?
Written by
G. Brian Davis
Edited by
Jenna Klaverweiden
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In January, President Donald Trump took to Truth Social to propose a ban on institutional investors buying single-family homes. It makes for a flashy sound bite, but would it actually affect housing markets?
Most economists and real estate experts don’t think so. “Institutional investors are an easy target as a villain on housing,” said Rebecca Hidalgo, broker at Integrity All Stars Realty. “The policy sounds good to many people, but it will barely move the needle.”
Here’s a deeper look a the president’s proposal and how it could impact the housing market.
Tiny Percentage of Homes Owned by Institutional Investors
A 2025 study by the American Enterprise Institute found that institutional investors owned less than 1% of single-family housing stock.
Even among investor-owned homes, mom-and-pop investors own the overwhelming majority. National Mortgage Professional reported in 2025 that institutional investors control just 2% of investor-owned homes.
They sound like a great bogeyman to rally middle-class buyers against — but they aren’t the root cause of affordability problems.
It Doesn’t Address the Core Problem: Housing Supply
Supply and demand move market prices, and buyers bid more for homes because there aren’t enough of them. Goldman Sachs estimated that the U.S. housing market would require 3 million to 4 million more housing units to have a balanced market.
David Temko, president at C2 Financial Corporation, put it succinctly: “Banning institutional investors doesn’t address the core issues like long-term housing undersupply and rising ownership costs such as taxes and insurance.”
Potential for Less New Supply
Some economists warn that the proposed ban could actually make the supply shortage worse.
“A decline in investor demand could slow new construction, offsetting any downward pressure on prices from the lack of institutional buyers,” explained Thomas Malone, economist at Cotality. “At the same time, rents could rise as reduced supply tightens the rental market, potentially pushing some buyers out of more affluent neighborhoods where homeownership is already out of reach.”
Less Liquidity and Demand for Fixer-Uppers
The typical homebuyer lacks the money, expertise and desire to buy properties with major mechanical or structural problems. Experienced and well-funded investors tackle these major gut-renovation projects — precisely the kind of buyer that President Trump proposes banning.
“These investors serve a purpose: a liquidity floor for the market. If you ban the big funds, who buys the fixer-uppers? We could see a weird stagnation where distressed inventory just sits,” said real estate broker Erik Leland of Realty First.
Which, again, isn’t going to do the housing supply any favors.
Quick-fix sound bites grab headlines, but they won’t actually solve the housing affordability crisis in the U.S. Only a surge in new supply can do that, but that requires more than just scapegoating Wall Street. It requires thoughtful policy incentives and regulatory changes.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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