On January 20th, President Trump signed an executive order limiting large institutional investors from purchasing single-family homes that were originally intended for individual families. The goal of this action is to ensure that American families have priority access in the housing market, addressing concerns about affordability.
In the executive order, Trump stated that homeownership has long been seen as the pinnacle of the American dream and a pathway for families to invest and accumulate lifelong wealth. The order emphasized that houses are meant for people to live in, not for corporations, and that the government’s policy aims to protect the supply of single-family homes for American families.
The executive order mandates federal agencies to take specific actions within a short timeframe. The Treasury Department must define what constitutes a “large institutional investor” and a “single-family home” within 30 days of the order’s signing.
Subsequently, departments including the Department of Agriculture, the Department of Housing and Urban Development (HUD), and the Department of Veterans Affairs must issue guidelines within 60 days to restrict federal assets from being transferred to large institutions and implement a “first-look” policy.
The White House accompanying policy documents state that federal agencies should establish priority purchase policies, allowing individual buyers to have the first opportunity to purchase foreclosed properties before investors.
In addition to limiting acquisitions, the Trump administration has instructed the Department of Justice and the Federal Trade Commission to investigate large institutional investors. The focus is on evaluating whether these institutions engage in anti-competitive practices in local markets, such as coordinating vacancies or pricing strategies, and prioritizing enforcement of antitrust laws.
With the midterm elections approaching, the Trump administration aims to expedite solutions to the burdens of high inflation and interest rates faced by voters. The administration has recently proposed significant policy changes with the goal of increasing homeownership rates and curbing living costs.
To alleviate the pressure on homebuyers, Trump has directed Fannie Mae and Freddie Mac to purchase $200 billion worth of mortgage-backed securities (MBS) to directly lower borrowing rates.
Data shows that since the 2008 financial crisis, Wall Street institutions like Blackstone have acquired thousands of single-family homes. According to a 2024 study, as of June 2022, institutional investors collectively owned approximately 450,000 homes in the US, accounting for 3% of all single-family rental properties.
It is important to note that this executive order does not ban all institutional participation in the housing market. The order specifically exempts properties built for rental purposes, which are specially planned, permitted, and constructed as rental communities.
This action by the Trump administration aligns with a longstanding policy goal of the Democratic Party, reflecting a bipartisan consensus on the issue.