Trump Pushes Ban on Institutional Homebuyers as Housing Affordability Becomes Political Flashpoint

BY EMMANUEL OGBONNA

President Donald Trump said Wednesday that he wants to prohibit large institutional investors from buying houses, arguing that such a move would help younger families and first-time buyers compete in an increasingly expensive housing market.

The proposal comes as Trump faces mounting pressure to address voter concerns over affordability ahead of the November midterm elections. Housing costs have emerged as a top economic issue, particularly for younger Americans who have been priced out of homeownership by rising prices, higher interest rates and limited supply.

In announcing his idea, Trump leaned into long-standing public frustration with the growing role of corporate ownership in residential real estate. Critics of institutional investors argue that large firms have helped drive up prices by outbidding individual buyers and converting homes into rental properties, reducing the number of houses available for purchase.

“People live in homes, not corporations,” Trump said in a social media post, urging Congress to turn a ban on institutional buyers into law.

Trump has promised broader action on housing this year. In a prime-time address last month, he vowed to introduce what he described as some of the most aggressive housing reforms in U.S. history. He said he plans to lay out additional details on housing affordability in two weeks at the World Economic Forum in Davos, Switzerland, a gathering that typically draws global business leaders, investors and policymakers, many of whom are often at odds with Trump’s populist messaging.

The president has previously floated other unconventional housing ideas, including extending the standard 30-year mortgage to 50 years as a way to reduce monthly payments. Housing economists and consumer advocates have criticized that concept, warning that longer loans would leave buyers paying far more in interest over time while slowing their ability to build equity and wealth.

Despite Trump’s rhetoric, analysts say banning institutional investors would likely have a limited effect on overall housing affordability. Research published in August by the American Enterprise Institute found that large institutional investors account for roughly 1% of the nation’s total single-family housing stock. The study defined institutional investors as firms owning 100 or more single-family properties.

While institutional ownership is higher in certain metropolitan areas, it remains relatively modest even there. According to the analysis, such investors own about 4.2% of single-family homes in Atlanta, 2.6% in Dallas and 2.2% in Houston. The report also noted that corporate landlords are typically more concentrated in lower- and middle-income neighborhoods but do not generally dominate entire communities.

Some Democrats have also voiced support for restricting corporate ownership of housing, though they have questioned Trump’s broader approach to the issue. Senator Elizabeth Warren of Massachusetts said Wednesday that administration policies could actually worsen affordability by allowing major real estate companies such as Compass and Anywhere to merge, potentially reducing competition in the housing market.

She argued that the administration is responding to public pressure without fully addressing the structural causes of the housing crisis, adding that Democrats remain more focused on expanding supply and lowering costs for renters and buyers alike.

Congress has already taken limited steps in that direction. In October, the Senate passed a bipartisan bill backed by Warren that would encourage local governments to streamline zoning rules and adopt other policies aimed at increasing housing construction. The measure has stalled in the Republican-controlled House, leaving its future uncertain.

Economists widely agree that the most significant driver of high housing costs is a chronic shortage of homes. Goldman Sachs estimated last fall that the United States would need to build an additional 3 million to 4 million homes above normal construction levels to ease price pressures. At the same time, mortgage rates surged during the inflationary period following the coronavirus pandemic, pushing monthly payments sharply higher and far outpacing income growth.

Trump has acknowledged the tension between expanding supply and protecting existing homeowners. He has warned that a surge in new construction could reduce home values, potentially eroding the wealth of current owners who rely on rising property prices as a key part of their net worth.

“I don’t want to knock those numbers down because I want them to continue to have a big value for their house,” Trump said last month. “At the same time, I want to make it possible for young people out there and other people to buy housing. In a way, they’re at conflict.”

As the housing debate intensifies, Trump’s proposal to ban institutional investors highlights the political challenge of balancing affordability for new buyers with financial stability for existing homeowners, while addressing the deeper supply constraints that continue to shape the U.S. housing market.