U.S. Treasury Secretary Scott Bessent said President Donald Trump’s recent ban on large institutional investors purchasing single-family homes isn’t aimed at small landlords.
“Someone, maybe your parents, for their retirement, has bought 5, 10, 12 homes. We don’t want to push the mom and pops out,” Bessent said during a wide-ranging discussion at the World Economic Forum’s Annual Meeting in Davos.
“We just want to push everyone else out.”
According to Bessent, the administration plans to issue clear guidance distinguishing large institutional investors from individual owners who may have bought a handful of homes as retirement investments.
Focus on Housing Affordability
Bessent said the policy is designed to help ease housing affordability and rebalance the market by limiting competition from firms that benefit from tax advantages unavailable to average buyers.
“You and I have a mortgage. We can deduct the mortgage amount. Institutional investors can deduct the borrowing amount, but they can also expense any repairs and depreciation,” he said.
He pointed out that large funds began scooping up homes after the 2008 financial crisis, changing the character of the single-family housing market.
That dynamic continues today, especially in high-growth areas.
“Markets are made on the margin,” Bessent said.
“Institutional investors are much higher in boomtown markets like Charlotte, like Atlanta, like Huntsville, Alabama.”
While some reports claim institutions only own a small share of the market nationally, Bessent said their presence has an outsized impact in key cities.
Mortgage Market Support
To further address housing costs, the administration has also proposed that Fannie Mae and Freddie Mac increase their purchases of mortgage-backed securities (MBS).
The goal, Bessent said, is to narrow the spread between mortgage rates and U.S. Treasury yields, which would help lower interest rates for homebuyers.
“The mortgages are two parts: the 10-year bond yield, and the spread between mortgages and the 10-year yield,” he explained.
“The purpose of that is to narrow the spread.”
A Broader Strategy on Affordability
The housing policy is part of a broader effort by the Trump administration to increase affordability and support working families.
Bessent mentioned several initiatives during the Davos appearance, including a proposed 10% cap on credit card interest rates and generous tax refund projections.
“We could see for working families, for each wage earner, up to $1,000 in refunds,” Bessent said. He added that real incomes have risen every month since President Trump took office.
Bessent also addressed the administration’s aim to reduce the fiscal deficit, noting that tariff revenue is feeding into the general account and contributing to deficit reduction.
“We cut the deficit by about $200 billion,” he said, adding that the administration’s goal is to bring the deficit-to-GDP ratio down to 3% by the end of Trump’s term.
Redefining Market Participation
Bessent’s comments make clear that the administration views institutional ownership of housing as a national issue, not just a market trend.
By limiting large players, the government aims to preserve homeownership opportunities for everyday Americans.
While mom-and-pop landlords may not always be viewed sympathetically in today’s housing debates, Bessent drew a line between them and corporate investors with much deeper pockets and far more influence on pricing.
“We are going to give guidance at some point to see what is a mom and pop,” he said.
The new rules signal a dramatic shift in federal housing policy, one that prioritizes the long-term stability of residential communities over investor returns.
“It is a good idea to have them [institutional investors] out of the market,” Bessent said.
As the administration rolls out more specific definitions and guidelines, it remains to be seen how the policy will be enforced and what impact it will have on housing availability and prices.
Bessent emphasized that the goal is to protect American homeowners, not target small landlords trying to build a future for their families.