President Trump has signed an executive order to block institutional investors from purchasing single-family homes that could otherwise be bought by individual homeowners.
The order directs executive agencies to prevent the Federal Government from backing loans or providing financial incentives that support institutional investor purchases of single-family homes. It also prohibits the sale of federally owned homes to large institutional investors.
“My Administration will take decisive action to stop Wall Street from treating America’s neighborhoods like a trading floor and empower American families to own their homes,” Trump said in the order.
The directive instructs Treasury Secretary Scott Bessent to define “large institutional investor” and “single-family home” within 30 days. It also requires a legislative recommendation to codify the ban through Congress.
Trump’s order includes an exemption for “build-to-rent” developments—communities of newly constructed homes designed to be rented rather than sold. Developers say such projects do not compete with individual homebuyers but instead expand housing options in high-cost areas, the WSJ reports.
The Federal Trade Commission is directed to investigate whether large investors have limited competition in local housing markets, while the Department of Housing and Urban Development must establish a registry of single-family rental owners participating in federal housing programs.
Trump’s announcement comes ahead of his planned address at the World Economic Forum in Davos, where he is expected to outline his broader plan for improving housing affordability.
The White House stated that the order fulfills Trump’s earlier promise to immediately take steps to ban large institutional investors from buying additional single-family homes. According to the White House fact sheet, Trump has directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities to lower borrowing costs. The statement also notes that Trump’s Working Families Tax Cuts increased paychecks by over $10,000 for a typical family and that blocking unfinalized Biden-era rules saved the average family $2,100.
Institutional investors currently own an estimated 2% to 3% of the U.S. housing market, according to WSJ. Their involvement grew after the 2007 subprime mortgage crisis but has remained a small portion of total ownership.
Some developers warn the new policy could reduce investment in housing. “While the intention may be good, ultimately, any regulation on the single-family rental industry is only going to be deleterious to what he’s trying to do,” Adam Wolfson, a Florida build-to-rent developer, told WSJ.
Economists cited by WSJ said that Trump’s focus on boosting demand may not be sufficient to address affordability challenges without adding more housing supply.
