Trump targets institutional investors in housing affordability push

President Trump said he would move to ban institutional investors from buying single-family homes, the latest proposal from the administration to address housing affordability ahead of this year’s midterm elections.

“People live in homes, not corporations,” Trump said in a social media post Wednesday announcing the effort, adding that he would expound on the plan and other “Housing and Affordability proposals” at the World Economic Forum in Davos, Switzerland, later this month.

The news sent the S&P 1500 Homebuilding Index down almost 2.6%, with shares of homebuilders including Toll Brothers Inc., Invitation Homes Inc., KB Home and PulteGroup Inc. all down. Blackstone Inc. — a major investor in single-family homes in the U.S. — fell by as much as 9.3% before paring some losses.

The initiative comes after Trump’s allies have repeatedly raised alarms that affordability has become a political albatross for the GOP heading into the November elections. Trump urged Republican lawmakers Tuesday to avoid losing control of the House this year, saying it would lead to his impeachment.

There’s reason for the White House’s concern: Just 36% of Americans said they approved of Trump’s job performance in a Gallup poll released in December, about 2 percentage points higher than his personal low before his first term ended in January 2021. Nearly half of adults described current economic conditions as “poor.”

The president has struck a defensive posture on cost of living, especially since Democrats notched several high-profile state and local election victories in November that many analysts chalked up to their focus on affordability. Trump has called the issue a “hoax” and a “con job by the Democrats.”

The Trump administration in recent months has struggled to find the right tool to tackle high housing costs. At one point, officials floated the possibility of declaring a national housing emergency. A 50-year mortgage proposal lost momentum after industry analysts noted that borrowers would ultimately pay more in interest and build equity in their homes more slowly.

Trump officials have also said they are considering portable mortgages — an idea that would be tricky to implement. And Trump has trained his fire on homebuilders, urging them to build more homes.

It’s not clear how much of an impact an institutional-investor ban could have on housing prices. Larger institutional investors own only about 2% of the nation’s single-family rental housing stock.

Still, Trump’s post earned early support from some GOP lawmakers. Republican Sen. Bernie Moreno of Ohio announced he would introduce legislation to codify Trump’s proposal into law. Sen. Josh Hawley, a Republican from Missouri, also expressed support for the idea.

Representative Bryan Steil, a Wisconsin Republican and member of the House Financial Services Committee, said he welcomed the focus on housing policy and wanted to learn more details about the proposal.

“Far too many people can’t afford the homes that they could have a generation ago,” Steil said in a Wednesday interview on Bloomberg Television.

Democratic Sen. Elizabeth Warren of Massachusetts said on Wednesday that she’d been advocating for such a ban for years, but cast skepticism on Trump’s announcement.

“What the evidence shows is Donald Trump is not serious about lowering the cost of housing,” Warren said.

Talking point

Blaming corporations for the housing affordability crisis has become a familiar political talking point in recent years, with both the Democratic and Republican presidential campaigns in 2024 entertaining the idea. But industry economists say banning investors is a bad idea, as they are pouring money into a troubled market.

“I think at the end of the day, people want someone to blame,” said Jay Parsons, rental housing economist and consultant in Dallas. “They want to be able to point the finger and say, ‘There’s the problem.’”

Parsons said a better solution to bringing down prices would be to ramp up production, noting that rents and home prices have softened the most, or even declined, in U.S. Sun Belt cities that have seen the most construction.

The cost of housing has soared in recent years due to a historic supply shortage, after construction rates fell in the wake of the 2008 global financial crisis. A pandemic boom exacerbated the problem: As of August, the S&P Case-Shiller 20-City Composite Home Price Index had risen 68% since January 2020.

Distressed prices

Investors of all sizes accounted for about 30% of single-family home purchases in the beginning of 2025. But small investors account for more than 90% of the market of investor owners.

Institutional investors started buying foreclosed homes in bulk following the financial crisis, when firms like Blackstone and Donald Mullen’s Pretium started acquiring homes at deeply distressed prices.

A subsequent tightening in lending standards helped give larger investors a leg up on smaller competitors. At the same time, many people who had lost their homes were forced to rent, pushing up demand for single-family rentals. The purchases rose higher still in the wake of the pandemic amid soaring home prices and low borrowing costs.

In 2021 Blackstone bought Home Partners of America in a $6-billion deal that added 17,000 rentals to its holdings. More recently, it bought Toronto-based Tricon Residential Inc. in a $3.5-billion transaction that added 38,000 U.S. rental houses. Steve Schwarzman, Blackstone’s chief executive officer, has been a major donor to Trump’s political operation for years.

O’Donnell and Lowenkron write for Bloomberg.