President Donald Trump signed an executive order on Tuesday aimed at stopping large institutional investors from purchasing single-family homes in an effort to make homeownership more affordable for American families.
The order directs multiple federal agencies to develop restrictions within 60 days that would prevent Wall Street firms from competing with individual homebuyers in the residential housing market. Treasury Secretary Scott Bessent must define what constitutes a "large institutional investor" and "single-family home" within 30 days.
Within 60 days, federal housing agencies, including the Federal Housing Administration, Veterans Affairs, Fannie Mae, and Freddie Mac, will be prohibited from approving, insuring, guaranteeing, or securitizing home purchases by these large investors.
Federal Agencies and Regulatory Enforcement
Trump emphasized in the order that neighborhoods once controlled by middle-class families are now run by distant corporate interests, according to Reuters. "People live in homes, not corporations," the order states. The policy aims to preserve the supply of single-family homes for American families and increase paths to homeownership.
The Justice Department and Federal Trade Commission received directives to review substantial acquisitions by large institutional investors for anti-competitive effects. The agencies will prioritize enforcement of antitrust laws against coordinated vacancy and pricing strategies employed by these investors in local rental markets.
Wall Street entities such as Blackstone, American Homes 4 Rent, and Progress Residential have acquired thousands of single-family homes since the 2008 financial crisis triggered a surge in foreclosures.
By June 2022, institutional investors held approximately 450,000 homes, representing about 3 percent of all single-family rental properties nationwide, according to a 2024 Government Accountability Office report, Scanx reported.
The executive order includes narrowly tailored exceptions for build-to-rent properties. The Department of Housing and Urban Development must require landlords participating in federal housing assistance programs to disclose ownership and management information to identify any involvement of large institutional investors.
Market Impact and Political Timeline
Treasury Secretary Bessent clarified that the policy will be forward-looking and will not require investors to unwind current holdings. "The idea here is bygones are bygones," Bessent stated. "We're not going to have a forced sale here."
Trump announced the initiative ahead of the November midterm elections as his administration seeks to address voter concerns about housing affordability. The president had previously called for a ban on social media earlier this month, stating he would urge Congress to codify the policy.
Shares of major home leasing companies fell following Trump's announcement. Invitation Homes' stock dropped more than 6 percent, while American Homes 4 Rent declined 6.3 percent and Blackstone fell more than 4 percent, as per CNBC.
