Trump Signals Ban on Institutional Investors in Housing Market

President Donald Trump announced on Truth Social that his administration plans to ban large institutional investors from purchasing single-family homes, a step he says is intended to help lower home prices and expand opportunities for everyday buyers. In his January 7 post, Trump framed the proposal as part of a broader effort to restore the "American Dream" of homeownership.

The announcement did not include details about how such a ban would be carried out, but Trump said he intends to "[call] on Congress to codify it" into law and would be taking steps "immediately." The president said he plans to discuss the idea and additional housing policy initiatives at the World Economic Forum's annual meeting in Davos, Switzerland, which runs January 19 to 23.

So, what impact would that ban have, and why is it coming up now?

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Who counts as a "large institutional investor" in single-family housing

In the single-family housing debate, a "large institutional investor" typically means a company (often a private equity group or publicly traded REIT) that owns and manages a large portfolio of single-family rental (SFR) homes at scale — not a mom-and-pop landlord with a handful of properties.

Researchers and policymakers don't always use the same cutoff, but a common working definition for "large" is owners with 100 or more single-family homes, with the biggest players owning tens of thousands across multiple metro areas. The best-known names in this category include Blackstone, along with Invitation Homes (INVH), American Homes 4 Rent (AMH) and Progress Residential (owned by private equity firm Pretium). These firms run their operations like large property management companies.

They buy homes in target markets, renovate them, then lease and manage them using centralized systems. These major firms own hundreds of thousands of single-family rentals. The large investors collectively own about 450,000 single-family homes nationwide, according to a 2024 report by the U.S. Government Accountability Office (GAO).

The sector's rapid growth traces back to the aftermath of the 2007 to 2009 housing crash, when foreclosures and distressed sales created an opportunity for well-financed buyers to acquire homes in bulk and convert them into rentals. The GAO notes that institutional investors moved aggressively into single-family rentals after the housing downturn, building large portfolios of homes managed under a single company structure. One of the most prominent examples is Invitation Homes, which grew out of a platform backed by Blackstone and later became a public company.

How much of the housing market they actually control

Measured against the size of the U.S. housing market, institutional investors account for a small share of total single-family ownership. Research, including from the GAO, Brookings and Urban Institute, shows that firms typically defined as institutional owners control roughly 3% of the nation's single-family rental stock. That means the vast majority of single-family homes remain in the hands of individual homeowners or smaller landlords rather than large investment firms.

So, why is this idea coming up now from Trump? Even though institutional investors own only a small share of homes, investor buying activity has been more noticeable in recent years. Investors (of any size) accounted for roughly 30% of all single-family home purchases in the U.S. through the first three quarters of 2025, the highest share on record, according to Cotality. This came as many would-be buyers who would live in those homes, not use them as investments, were sidelined by high prices and elevated mortgage rates.

However, much of that buying came from smaller investors and "mom-and-pop" landlords, not the largest players, and institutional firms remain a minority of total ownership.

In some cities and regions where job growth and housing demand are strong, institutional shares of rental homes can exceed the national average, giving these firms a more pronounced footprint locally even if their overall national ownership remains modest.

How home buying behavior has shifted recently

Institutional buying of single-family homes has pulled back sharply from pandemic-era highs. Large institutional investors bought about 0.3% of all U.S. homes sold in 2024, down around 90% from 2022 and at the lowest level in more than a decade, according to data published by Blackstone.

This trend reflects both a broader downturn in the housing market and a pullback by well-financed buyers as rising prices and tighter returns have made large purchases less attractive.

The shift also meant that some of the largest players were net sellers in 2024, a notable change from earlier years when firms were primarily buyers. In other words, major institutional landlords sold more homes than they acquired last year, which suggests that large investors are no longer expanding their portfolios at the same pace.

Pros and cons of a ban

Supporters of the type of ban Trump suggested say that limiting large institutional investors could reduce competition for entry-level homes, giving first-time buyers a better chance to compete in tight markets. In many metros, cash-heavy investors can move faster than individual buyers who rely on mortgage financing, making it harder for individuals and families to secure affordable homes.

Critics counter that institutional investors already represent a relatively small share of total single-family home ownership, meaning a ban may have only a modest effect on overall prices or availability, according to MarketWatch.

Economists frequently point to chronic housing supply shortages, not investor ownership, as the primary driver of high home prices, especially in fast-growing regions where new construction has not kept pace with demand.

There are also practical questions about how such a ban would be implemented and enforced. Restrictions would likely require congressional action, and defining which buyers qualify as "large institutional investors" could prove complex. Without clear legislative authority and enforcement mechanisms, implementing any restrictions could be difficult to enforce consistently across different states and markets.

Financial markets responded quickly after the announcement, with shares of major real estate investment firms slipping as investors reacted to the possibility of restrictions on institutional home buying. Blackstone's stock fell as much as 9.3% before rebounding slightly, and related housing stocks also traded lower in the wake of the news, according to Bloomberg's market coverage.

Factors shaping housing affordability

Beyond investor activity, housing affordability is being shaped by larger structural pressures, including years of underbuilding, restrictive zoning in many communities, elevated construction costs and still-high mortgage rates.

Housing economists have consistently pointed to a decades-long shortage of new home construction, which has left many markets undersupplied as population growth and more people forming their own households outpaced home construction.

Until housing supply expands, affordability challenges are likely to persist regardless of who is buying homes, underscoring why policymakers continue to focus on zoning reform, construction incentives, and mortgage rates and borrowing costs alongside investor activity.

What to watch for next

Details on how a ban would be implemented remain limited, with no formal legislative or regulatory language released so far. Any restrictions would likely require congressional action, a process and timeline that could be influenced by lawmakers' priorities and the upcoming midterm elections.

Trump has said he plans to outline the proposal further at the World Economic Forum in Davos and push Congress to codify the policy, setting the stage for more detailed debate in the weeks ahead.

For buyers waiting on the sidelines, the announcement is unlikely to change affordability or competition any time soon. The legislative process could take some time, and any market impact would likely be gradual.

Prospective buyers may be better served by focusing on what they can control now, such as monitoring mortgage rates, strengthening their credit, building savings for a down payment and tracking local inventory, rather than waiting on potential policy changes.

Curious about today's interest rates? Use the tool below to explore and compare some of today's top mortgage product offers, powered by Bankrate:

Carla Ayers joined Kiplinger in 2024 as the eCommerce and Personal Finance Editor. Her professional background spans both commercial and residential real estate, enriching her writing with firsthand industry insights.

Carla has worked as a personal finance and real estate writer for Rocket Mortgage, Inman and other industry publications.

She is passionate about making complex real estate and financial topics accessible to all readers. Dedicated to transparency and clarity, her ultimate goal is to help her audience make informed and confident decisions in their financial pursuits.