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By Giulia Carbonaro
Senior Reporter
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President Donald Trump’s threat to ban institutional investors from buying single-family homes in the U.S. has sparked backlash among industry insiders, who believe they are being scapegoated for the ongoing housing affordability crisis.
"Blaming institutional ownership for housing unaffordability is inaccurate and gets both the problem and the solution wrong," Sean Dobson, chairman, chief executive officer and chief information officer of Amherst, a real estate investment and development firm, told Newsweek.
"Our industry is not the cause of the housing crisis, it is part of the solution," he added.
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Experts with less skin in the game largely agree with this view, saying that institutional investors "play a relatively small role in the market for owning single-family homes," as Cato Institute Vice President and Director of the Center for Monetary and Financial Alternatives, Norbert Michel, said in a statement shared with Newsweek.
"The economic impact would be modest at best," Realtor.com Senior Economist Jake Krimmel told Newsweek.
What Has Trump Said About Banning Institutional Investors?
Trump announced his plan to ban large institutional investors from buying additional single-family homes in a post on his social media platform Truth Social on Wednesday.
"For a very long time, buying and owning a home was considered the pinnacle of the American dream. But now [...] that American dream is increasingly out of reach for far too many people, especially young Americans," the president wrote.
"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," he added. "People live in homes, not corporations."
Trump’s proposal, from his phrasing of it, seems to focus on banning future purchases rather than forcing existing owners to sell.
While the president did not offer many details in his post, he said that he will discuss the topic, "including further Housing and Affordability proposals, and more" during his address at the World Economic Forum in Davos, Switzerland, later this month.
Are Institutional Investors To Blame For the Current Affordability Crisis?
During the pandemic’s homebuying frenzy, when historically low borrowing costs spurred a surge in demand across the country, investors snatched a record number of homes in the U.S. housing market.
In 2023, when buying a home was particularly hard to afford for Americans, investors bought a record share of homes, 26 percent, further reducing the limited stock available to buyers. But the phenomenon has since subsided significantly.
Wall Street investor Blackstone has said that institutions own 0.5 percent of all single-family homes in the US. Laurie Goodman, a fellow at the Urban Institute, told the BBC that her research found that institutional investors—described as owning at least 1,000 units in three or more locations—own about 4 percent of the single-family market.
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Housing experts tend to agree with industry insiders in saying institutional investors are not the cause of the current affordability crisis in the nation, which has its roots in a chronic lack of inventory which can be traced back to underbuilding when compared with demand in the years following the subprime mortgage crisis.
According to the latest Realtor.com Investor Report, investors accounted for about 10.8 percent of home purchases in mid-2025, and "more than 60 percent of that activity came from small, mom-and-pop investors (those with 10 or fewer purchases since 2001), not large corporations," Krimmel said.
Large investor activity, according to the economist, has been declining since 2022, while small investor participation has been rising and recently reached its highest level since 2007. "In other words, the segment this policy targets is an already narrow and shrinking slice of the market," he added.
"Large corporate ownership is a red herring in the broader supply debate: most single-family rentals are owned by small landlords, and many of the markets where institutional investors have been most active are also places where inventory has already been rising and price growth has cooled over the past two years," he said.
Dobson said that "America’s housing crisis stems from years of policy failure, not the families who rent or the capital that houses them."
"At Amherst, we serve more than 200,000 residents, nearly 85 percent of whom would not qualify to buy the homes they live in today. Putting institutional rental housing at risk threatens real families and is unacceptable," he added, claiming the positive role often played by investors buying single-family homes.
"Through private, unsubsidized investment, institutional capital restores neglected housing and delivers real solutions at a time when much of the housing finance system no longer works."
What Impact Would This Have On the U.S. Housing Market?
First of all, it is important to note that it is unclear whether the federal government can legally bar certain buyers from purchasing single-family homes, Krimmel said, "and the lack of detail here makes it impossible to assess how such a policy would actually work in practice."
Then there is its potential impact. For Krimmel, Trump’s proposal to ban institutional investors "is unlikely to move the needle on affordability" in the U.S. housing market.
"The affordability crisis is fundamentally a supply problem, and meaningful relief requires adding homes, both through new construction or through inventory gains in chronically constrained markets, particularly in the Northeast and Midwest," Krimmel said.
"The proposed ban might resonate politically, but the numbers suggest it would have limited reach and would not address the core shortage driving today’s housing affordability issues," he added.
Daryl Fairweather, chief economist at Redfin, warned that "a ban on corporate landlords might hurt development of new affordable housing units," sabotaging efforts to build new homes.
"Banning large corporations from owning single-family homes may have negative unintended consequences, or it may have no real effect at all," she wrote in a report on Wednesday. "These bans would likely shift home purchases from large corporations to medium and small corporations, without a noticeable impact on the existing dynamics of the housing market," she added.
"It’s disheartening that political leaders spend their energy fighting a problem that has nothing to do with the root of the housing crisis: the shortage of homes."
For Michel and the Cato Institute, a Washington-based libertarian think tank, Trump’s threat is wrong in principle, no matter how modest its impact would be on the housing market or how ineffective.
Regardless of how small the share of institutional investors buying single-family homes might be, "nationally or in specific local markets, the federal government should not be in the business of banning certain people or firms from buying homes or anything else," Michel said.
"Infusing private capital into housing markets, as with other segments of the economy, should be welcomed because it has positive long-term effects."
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