The president Donald Trump takes another step in improving housing affordability, this time, by targeting institutional investors.
“I am immediately taking action to prevent large investors from buying single-family homes, and I will call on Congress to act,” he wrote in a Truth Social post. “People live in houses, not in companies.”
Details have not yet emerged on the specifics of what that legislation will look like, and the White House did not immediately return a request for comment from Realtor.com®. But the political appeal is clear: Blame Wall Street, free the families’ homes.
Except that investor purchases are not evenly distributed across the country. In much of the US, the ban could come in handy when affordability is already a problem. And in the few places where it can move the needle, it can also hit the rental property in ways that create a different kind of compression.
Large institutional investors have little national presence
To understand what Trump’s proposed ban would accomplish, it’s important to first clarify who and what is targeting this first phase. The current focus is on institutional investors—generally defined as organizations that own 100 or more homes. The second objective is the type of housing they own: Single-family homes that are owned as rentals.
While large investors appear to be big in the political imagination, their actual place in the US housing market is limited.
“The impact of investors on the real estate market (both rented and owned) is greatly exaggerated by politicians on both sides of the aisle,” it said. Jake Krimmelchief economist at Realtor.com.
As of November 2025, institutional investors owned only about 1% of America’s single-family rental stock, according to a Parcl Labs data analysis by the American Enterprise Institute. Some estimates put that number slightly higher at around 2% to 3%.
So why are they the usual political punching bag?
“Wall Street investors sound guilty but they are rednecks when it comes to the problem of not being able to buy houses,” explained Krimmel. “Nationally and in many neighborhoods, they’re not big players, so stopping them from buying single-family homes going forward is not going to free up a lot of traditional buyers.”
Alex BlackwoodCEO of real estate platform Mogul, put it bluntly: “To be honest, I think he’s more of a scapegoat than anything else.”
Still, politics is powerful. In a recent Realtor.com survey, a majority of Americans said they view home ownership as part of the American dream, but very few believe the dream is attainable.
That can make any investor job, no matter the size, feel like a slap in the face. And while investors are involved in the real estate market, their influence is largely driven by small, mom-and-pop buyers.
By mid-2025, investors accounted for 10.8% of home purchases, and more than 60% of that activity came from small investors (defined as those with 10 or fewer purchases since 2001), according to the latest investor report from Realtor.com.
Even loosely defining the “big investor” as those with 51 lifetime purchases or more, they still make up less than 20% of investor purchases in the first quarter of 2025. And their share is decreasing slightly from 2022, while small investors have grown more active, reaching their highest share since 2007.
“In other words,” Krimmel said, “the target segment of this policy is an already small and shrinking slice of the market.”
However, the tension is still there. While everyday Americans feel locked out of home ownership, investors big and small continue to hold on tight, making the idea of a ban like this one resonating.
But Krimmel warns that even if such a ban were legally possible, it would not solve the problem.
“The proposed ban may sound political, but the numbers suggest it will have limited access and will not solve today’s housing shortage,” he said.
In selected metros, they own up to 27% of the shares of a single family
Although large institutional investors make up a small portion of the national housing market, their presence in certain metropolitan areas is concentrated—and that’s where federal restrictions can make a difference.
A now widely cited 2023 report from the Hamilton Project found that nearly 80 percent of the 446,000 single-family homes owned by large investors (those with 1,000 or more homes) are located in just 20 metropolitan areas, mostly in the Southeast and Southwest.
“According to the high level of the area, the ban on institutional investment in the future may be a little less. But this is the exception, not the rule,” said Krimmel.
In Atlanta, institutional investors own 27% of all single-family rental housing, the report said. In Jacksonville, the share is 22%. In Charlotte, it’s about 20%. In these areas, a hold on future acquisitions may slow the growth of investors and modestly increase the likelihood of purchasing a home over time.
In areas that are more focused on institutional investment, about 70 percent of the homes they acquire were previously owned by individual homeowners, according to a recent study. Konhee Chang at the University of California Berkeley. Once converted to rentals, those homes rarely return to the market to find buyers.
Blackwood says the driver of this is operational complexity.
“It’s really difficult to make that a no-rent area. You already have tenants,” he explained. “One is not going to say, ‘We’re going to make sure every house is vacant for the next buyer.’ That would be very difficult to do.”
That creates a shock to the local supply of home buyers that may reduce home ownership values and increase prices. Chang’s research found that in census tracts where investors acquired 10 or more properties, homeownership rates fell by about 2%, while home values rose by the same amount.
Krimmel emphasizes that while these investor-owned areas exist, they are not the norm, and focusing on them can obscure the root cause of housing affordability.
“These are serious cases,” he says. “The problem of insolvency is primarily a supply problem, and meaningful relief requires the addition of homes, either through new construction or through capital gains in an increasingly constrained market.”
The hot spots for investors are not where affordability is so tight right now
Even in the limited number of markets where institutional investors are strong, affordability pressures have eased in recent months, making the idea of national restrictions even more severe in the housing market’s pain points.
“Institutional investor activity has been particularly prominent in the Sun Belt, which has ironically seen little pressure on affordability recently,” Krimmel said. “Compared to other regions, home prices have fallen significantly in the South and inventory has increased significantly.”
At the same time, the worst conditions of accessibility are seen in areas with the least activity of institutional investors.
“The problem of not being able to cover costs is particularly acute in cities in the Northeast, Midwest, and West Coast right now — all places where institutional investors don’t have a clue,” Krimmel explained. “So barring them from buying in the future would not interfere with much of the country’s availability and inventory.”
He also warns that the ban could end up hurting tenants. These investors have expanded the growing rental options, especially in urban areas where multi-family housing is in short supply.
This increase in the supply of employment has measurable effects. In census tracts with high investor activity, Chang’s research finds that while home values have increased by an average of 2.2%, rents have actually decreased by about 2%.
These changes are especially important for low-income and low-income renters, who can benefit from access to single-family homes in school districts and neighborhoods they would otherwise not be able to afford.
So who could help?
According to Blackwell, the biggest beneficiaries may not be traditional buyers, but rather small investors who are already managing investor operations across the country.
If the proposed ban is aimed only at large firms, it is unlikely to flood the market with individual consumer housing. Instead, it may just change the market share, from the big platforms to the smaller players.
And that change may already be underway. In a recent 21-month period, large institutional investors sold more homes than they bought, acquiring 178,000 and selling 185,000, for a net reduction of 7,000 homes in their portfolios, according to the American Enterprise Institute. Remember, that’s in contrast to the small investors who have controlled their largest share of home purchases since 2007.
In other words, policy aimed at Wall Street may end up empowering Main Street—not in the way many would expect.
