Trump announces plans to ban institutional investors from buying single-family homes
Trump looks to ban large financial institutions from investing in single-family homes
Housing market is locked up by a ‘supply issue,’ says economic strategist
Scarlet Oak economic strategist and wealth manager Frances Newton assesses the state of the market and the Federal Reserve’s strategy on ‘Making Money.’
President Donald Trump on Wednesday announced plans to ban institutional investors from purchasing single-family homes in what he sees as a means of improving affordability for Americans.
Trump wrote in a post on his Truth Social platform that, "For a very long time, buying and owning a home was considered the pinnacle of the American Dream."
"It was the reward for working hard, and doing the right thing, but now, because of the Record High Inflation caused by Joe Biden and the Democrats in Congress, that American Dream is increasingly out of reach for far too many people, especially younger Americans."
TEXAS, FLORIDA AGAIN TOP U-HAUL ‘GROWTH INDEX’
Trump's plan to ban single-family home purchases by financial institutions aims to boost affordability. (Getty Images / Getty Images)
"It is for that reason, and much more, that I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it," Trump said.
The president added that he "will discuss this topic, including further Housing and Affordability proposals, and more, at my speech in Davos in two weeks."
HOUSING MARKET EXPECTED TO OFFER LITTLE RELIEF FOR BUYERS IN 2026 DESPITE MODEST IMPROVEMENTS AHEAD
Large financial institutions like Blackstone have purchased thousands of single-family homes since the 2008 financial crisis spurred a wave of home foreclosures.
Firms are increasingly investing in rental homes, which have outperformed other commercial property sectors like offices and retail in recent years amid rising borrowing costs and shifts in work patterns.
Shares in housing sector firms, including institutions involved in buying single-family homes, sank on Trump's announcement. (Matthew Busch/Bloomberg/Getty Images / Getty Images)
Housing advocates and lawmakers, including Democrats, have criticized institutional landlords as having constrained the housing supply and increased rental costs for Americans.
POWELL SAYS RATE CUTS WON'T MAKE ‘MUCH OF A DIFFERENCE’ FOR STRUGGLING HOUSING SECTOR
It's unclear what legal authorities the president will cite in his push to ban institutional firms from buying homes, or what additional measures he's pushing for Congress to take.
The president's announcement caused shares in homebuilders to plunge during Wednesday's trading session.
President Donald Trump said he plans to move forward with actions aimed at banning institutions from buying single-family homes. (Ken Cedeno/Reuters / Reuters)
American Homes 4 Rent, a company that acquires homes for the rental market, saw shares fall to near a three-year low, with trading temporarily halted for volatility. The stock pared some of its losses after trading resumed and was down about 3.4% ahead of the closing bell.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AMH | AMERICAN HOMES 4 RENT | 31.63 | +0.62 | +2.00% |
The PHLX housing index was down over 2.6% on Wednesday, which was on track for its biggest single-day percentage drop since Nov. 17.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Asset management firm Blackstone, which has invested in single-family homes, had shares fall by more than 5.9% near the end of the trading session.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BX | BLACKSTONE INC. | 155.25 | +1.68 | +1.09% |
Blackstone said in a January research note that institutions own only 0.5% of all single-family homes in the U.S.