US President Donald Trump recently announced his plan to prohibit large corporate investors from purchasing single-family homes. His goal? To make housing more affordable for everyday Americans. In a post on social media, he mentioned he would push Congress to formalize this effort and discuss it further at the upcoming World Economic Forum in Davos.
This idea isn’t brand new. Housing advocates have been raising concerns for years about Wall Street’s growing role in residential markets. However, some experts doubt that banning big investors will significantly impact housing prices.
Shares of major investors like Blackstone slipped more than 5% following Trump’s announcement. He stressed that the American Dream of homeownership is slipping away, especially for younger people, stating, “People live in homes, not corporations.”
The White House hasn’t clarified whether this proposal would need congressional approval. Increasing public dissatisfaction about economic issues, particularly rising living costs, has put home affordability in the spotlight.
Supporters, like Sam Garin from the Private Equity Stakeholder Project, welcomed Trump’s commitment but urged for more comprehensive policies. Since the 2008 financial crisis, companies like Blackstone have acquired numerous homes to rent, becoming significant players in the market. This has led to rising rents and home prices, drawing bipartisan scrutiny. In previous attempts, legislative efforts to control these firms faced resistance, particularly from Republican lawmakers.
On the day of Trump’s announcement, shares of various property-related companies fell. For instance, Builders FirstSource and Invitation Homes saw drops of over 5%. Yet, some analysts are skeptical about the effectiveness of a corporate ban. Research by Laurie Goodman from the Urban Institute shows that institutional investors own approximately 4% of the single-family housing market. This proportion has remained stable despite rising interest rates and home prices.
Goodman emphasizes that the impact of any potential ban hinges on how “large” investors are defined and raised concerns regarding existing properties held by these firms. She suggested that instead of an outright ban, there should be stricter requirements for institutional investors to support their tenants better.
Daryl Fairweather, chief economist at Redfin, warned that if large corporations were restricted, they might be replaced by smaller investors rather than benefiting first-time buyers, which could perpetuate the affordability crisis.
As the conversation on housing continues, it remains to be seen how effective these proposed measures will be in truly making homes accessible for everyone.
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