New Measures to Curb Institutional Purchases
On Tuesday, President Trump directed his administration to create regulations aimed at preventing institutional investors from acquiring single-family homes. This initiative is part of his broader strategy to tackle escalating housing costs.
According to the order, Treasury Secretary Scott Bessent has a 60-day window to establish rules that would restrict large institutional buyers from purchasing single-family residences while encouraging sales to individual homeowners.
The executive order highlights concerns that hardworking young families struggle to compete for starter homes against Wall Street firms with significant financial resources. It states, “Neighborhoods and communities once controlled by middle-class American families are now run by faraway corporate interests. People live in homes, not corporations.”
The order emphasizes the administration’s commitment to preserving single-family home availability for American families and enhancing opportunities for homeownership. It asserts that large institutional investors should refrain from buying homes that could otherwise be purchased by families.
It remains uncertain whether President Trump possesses the authority to enforce such a ban without Congressional approval. The concept has been previously suggested by Democratic lawmakers.
This month, following Trump’s proposal, Representative Ro Khanna, a California Democrat and frequent critic of the president, introduced a bill in the House aimed at addressing this issue.
Institutional investors—large entities like pension funds or mutual funds—began acquiring single-family homes after the 2007 mortgage crisis. Blackstone, the largest private-equity owner of apartments in the U.S., has invested billions in real estate companies over recent years.
The exact percentage of the housing market owned by institutional investors is unclear. Estimates suggest it could be around 2% or 3%, but in competitive markets like Phoenix, Miami, or Las Vegas, this figure may reach as high as 20%.
Sun Belt cities have become prime targets for these investors. A recent analysis indicated that large institutions own approximately 25% of rental properties in Atlanta and 18% in Charlotte.
Home prices have surged over 50% since 2019, with median prices now at $409,200. Consequently, home buying has decreased over the past three years due to rising mortgage rates and housing expenses.
Institutional investors often make all-cash offers and can afford renovations without negotiating minor details with sellers, giving them an edge in the competitive housing market.
