President Trump recently announced a new initiative to address America's tight housing inventory by proposing a ban on large investment companies from buying single-family houses. The announcement was made on Truth Social, where Trump stated that removing private equity firms and similar investors from the market could help more first-time home buyers enter.
According to a 2024 report by the Government Accountability Office, institutional investors "may have contributed to increasing home prices and rents and helped stabilize neighborhoods following the financial crisis." However, the report noted that the impact on "homeownership opportunities" remains unclear.
Data from Cotality, a real estate analytics firm, showed investor activity rose from 29% in June 2025 to 30% in September 2025. "This upward trend continues to build on the elevated market share controlled by investors since late 2024 and represents a year-over-year increase of three percentage points," the analysis found.
Yet, the role of Wall Street investors is debated. In an October 2025 analysis, Realtor.com said, "Even in states with the highest rates of investor ownership, it’s not institutional buyers driving the trend." More than 90% of investor-owned single-family homes are held by small investors with less than 11 properties, based on data from CJ Patrick Co. and BatchData. States with the largest share of investor-owned homes include Maine, Montana, Alaska, and Hawaii.
Research from Wharton real estate professor Joseph Gyourko and Harvard economics professor Edward Glaeser points to local building restrictions as a key factor in the housing shortage. They found that home building boomed in the 1950s and '60s but fell by half over the next three decades, a trend that continues today. Local governments, especially in the Sunbelt, are hampering construction with restrictive zoning and permitting laws to "slow and stop new developments."
"I think the most important thing is change at the local level," Gyourko said. "There has to be a recognition that these high prices are largely — not totally — due to restrictive permitting and higher regulation at the local level."
Ed Brady, president and CEO of the Home Builders Institute, echoed this view. "That is probably very close to the top of the list of challenges with communities that are struggling with affordability — restrictions put on by cities, states, or municipalities," Brady said. "That is the reason that 25% of the cost of a single-family home in America is regulatory issues — $100,000 of a $400,000 house is a regulatory burden, soft costs that don't go into the sticks and bricks of the construction. That's a huge burden."
On the potential impact of Trump's proposed ban, Cotality principal economist Thom Malone said, "It would likely put downward pressure on prices by reducing demand in the market. However, institutional investors historically account for only a small share of total home purchases — around 1% to 2% — so the overall impact on prices would probably be modest." Malone added that restricting institutional activity could reduce supply in the single-family rental market, potentially making renting more expensive, and might slow construction activity.
Realtor.com senior economist Jake Krimmel believed the proposal is unlikely to significantly affect affordability. "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," Krimmel said. "Large corporate ownership is a red herring in the broader supply debate."
HBI's Brady emphasized the complexity of the issue. "You're not going to get an overnight fix on the affordability issue," Brady said. "We've lost a big segment of the population that has been the traditional first-time home buyer because they can't afford it. With regulatory burdens, land use, tariffs, trade, all those things, it's a perfect storm where the price of housing is just too high."