President Donald Trump says he’s taking immediate steps to block large institutional investors from buying up single-family homes, a move he claims will help make housing more affordable for American families.
But some economists and real estate experts aren’t so sure it will work as intended.
Earlier this week, Trump posted on Truth Social:
“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.”
He blamed what he called “Record High Inflation” under President Joe Biden and Democrats for pricing young Americans out of homeownership and said more details would be shared during his Jan. 19 speech at the World Economic Forum in Davos.
Schiff: Ban Would Be Unconstitutional and Bad Economics
Economist and money manager Peter Schiff responded harshly to Trump’s proposal.
“Providing even more proof that he doesn’t understand the U.S. Constitution or economics, Trump wants to ban institutional investors from buying single-family homes,” Schiff wrote on X.
“While this unconstitutional ban would lower home values, it would also lead to fewer rental homes and higher rents.”
Schiff later expanded on his view in replies to commenters, pointing out that not everyone wants to buy a home or take on the risks of ownership.
“Well a lot of people who want to live in single-family homes can’t afford to own them. Apart from the high cost to buy, many people don’t want to assume the risks and extra costs that come with home ownership,” he wrote.
He also pushed back on the idea that investor-owned homes aren’t typically rented.
“The ones owned by investors are,” Schiff said.
Mixed Reactions Online
The backlash to Schiff’s post was swift, with many arguing that limiting investor access to homes would give regular people a better shot at buying.
One person said, “We want fewer rental homes and more individual family home ownership. How out of touch can you get?”
Another added, “Who wants to rent when they can buy????”
Schiff replied, “A lot of people. I chose to rent single-family homes for many years before I finally decided to buy one.”
Some people took a more nuanced view. One wrote, “Both outcomes can be true. Lower home values help buyers, fewer rentals hurts renters. The question is which problem you’re solving for. Different policy goals, different trade-offs.”
Investor Activity Already Falling
Some critics of Trump’s plan pointed out that institutional homebuying has already dropped.
According to Realtor, institutional investor purchases fell from 28.1% of all residential sales to just 12.4% by the third quarter of 2025, before Trump announced the policy.
Economist Jake Krimmel of Realtor also questioned the plan’s impact.
“The proposal is unlikely to move the needle on affordability,” he said.
“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 also noted that large institutional investors make up a small portion of the market.
In the second quarter of 2025, they bought fewer than 20,000 homes, just 20% of all investor purchases, and under 11% of total residential transactions.
Realtors Support Affordability Goals, Caution on Strategy
The National Association of Realtors issued a more measured response.
“We share the goal of ensuring there are enough places for people to live and of expanding access to homeownership, especially for first-time buyers, and ensuring that housing policy strengthens communities rather than limiting opportunity,” said Shannon McGahn, the group’s executive vice president and chief advocacy officer.
At their November 2025 conference, the organization backed a policy that would encourage large institutional owners to sell homes back to owner-occupants.
But McGahn also emphasized the need to boost housing supply overall.
“As the administration and Congress continue to develop proposals in this space, NAR looks forward to working collaboratively to share our research, policy expertise, and practical solutions that boost supply, improve affordability, and put more families on a sustainable path to homeownership,” she said.
Legal Questions Remain
Sen. Bernie Moreno, a Republican from Ohio, expressed support for Trump’s plan and said he will introduce a bill to codify it into law.
But it remains unclear how the administration would legally enforce a ban on certain buyers.
“Whether the federal government can legally bar certain buyers from purchasing single-family homes is far from settled, and the lack of detail here makes it impossible to assess how such a policy would actually work in practice,” said Krimmel.
Trump’s proposal has already sent ripples through the stock market.
Shares of major homebuilders like Toll Brothers and KB Home fell, and Blackstone’s stock briefly dropped more than 9% before recovering.
Despite the pushback, Trump remains committed to pushing housing reform to the top of his 2026 agenda.
But as economists warn, the fix for affordability may lie more in building homes than banning buyers.
IMAGE CREDIT: “Peter Schiff” by Gage Skidmore, via Flickr. Licensed under CC BY-SA 2.0. Image adjusted for layout.