Trump wants ban on large investor home purchases

President Donald Trump said Wednesday that he is moving to ban large institutional investors from buying single-family homes, framing the proposal as a way to improve housing affordability.

“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. People live in homes, not corporations,” Trump wrote on Truth Social. 

Real estate investment trusts (REITs), private equity firms and other large institutional investors have expanded their single-family rental portfolios in recent years, drawing criticism from housing advocates and lawmakers who argue that investor activity has constrained supply and pushed home prices higher.

Markets reacted swiftly to Trump’s comments. Shares of Invitation Homes — the nation’s largest owner of single-family rental homes — fell more than 7% Wednesday afternoon. Blackstone, a major player in the space that acquired Home Partners of America for $6 billion in 2021 and Tricon Residential  for $3.5 billion in 2024, was down about 5%.

Analysts at Keefe, Bruyette & Woods wrote in a report that single-family rental REITs, including American Homes 4 Rent (AMH) and Invitation Homes (INVH), declined between 7% and 9%, while homebuilders fell about 2%. Mortgage originators, meanwhile, were either flat or growing in the high single digits.

The analysts described the market reaction as “excessive.” That’s because single-family rental REITs buy a modest amount of homes off the MLS – most acquisitions at this point are from homebuilder channels or direct development. Meanwhile, lenders would direct inventory to end up elsewhere in the market.

“While policy uncertainty is meaningful, there should be a limited near-term impact,” KBW analysts wrote. “Any legal ban would require legislation and likely exemptions for new construction, leaving the business model largely intact. Meanwhile, homebuilders could face a modest headwind from losing an estimated 3-5% of sales volume tied to SFR buyers.” 

Trump did not provide details on how the proposed ban would be implemented, but in his social post, he blamed what he called “Record High Inflation caused by Joe Biden and The Democrats in Congress” for pushing the American Dream “out of reach for far too many people, especially younger Americans.” He is expected to outline additional proposals during a speech at the World Economic Forum in Davos in two weeks.

Lawmakers have previously attempted to restrict hedge funds and large investors from participating in the single-family housing market, citing affordability and supply concerns.

Trump’s comments come as investor activity has largely flattened. According to a Redfin report released in December, investors purchased about 52,000 homes in the third quarter of 2025, up 1% from a year earlier. Those purchases accounted for roughly 17% of all U.S. home sales during the period.

The report also found that profitability has become more challenging for both flippers and landlords, with the share of investor-owned homes that sold at a loss reaching its highest level in two years. Still, some long-term investors continue to deploy capital, taking advantage of reduced competition.

Cotality principal economist Thom Malone told HousingWire in a statement that a ban “could reduce home prices, but the effect would likely be modest, since most investors are small-scale buyers rather than large institutional players.”

Data from Cotality shows that investors accounted for about 30% of all home purchases in September 2025. Small investors — defined as those owning fewer than 10 properties — made up 14.2% of buyers, compared with just 2.5% for mega-investors that hold more than 1,000 homes.

Malone noted that impacts of such a policy would vary by location, with Atlanta being the only major city where institutional investors account for more than 10% of home purchases. And the proposal could have a minimal impact since it would only restrict future purchases rather than requiring investors to sell their current holdings.

“A decline in investor demand could also slow new construction, offsetting some of the downward pressure on prices. At the same time, rents could rise as reduced supply tightens the rental market, potentially pushing some buyers out of more affluent neighborhoods where homeownership is already out of reach,” Malone added.

Editor’s note: This story was updated with comments from Cotality’s Thom Malone.