Trump says he wants to ban large investors from buying houses. It’s part of his affordability plan

President Donald Trump announced Wednesday his intention to block large institutional investors from purchasing homes, arguing that such a ban would make homeownership more accessible for younger families entering the market.

“People live in homes, not corporations,” Trump declared in a social media post where he called on Congress to codify the proposed ban. The move comes as the president faces mounting pressure to address voter concerns about housing affordability ahead of November’s midterm elections.

The proposal taps into widespread anxiety that corporate ownership of residential properties has displaced traditional homebuyers, forcing more Americans into rental situations. However, experts note that Trump’s plan does little to address the fundamental challenges plaguing the housing market: a critical nationwide shortage of home construction and housing prices that have consistently outpaced income growth.

Last month, Trump promised in a prime-time address to roll out “some of the most aggressive housing reform plans in American history” this year. He indicated he would elaborate on housing and affordability issues in two weeks at the World Economic Forum in Davos, Switzerland – an event typically attended by CEOs, wealthy financiers, and academics whose global perspectives often contrast with Trump’s populist messaging.

This isn’t the president’s first unconventional housing proposal. Previously, he suggested extending standard 30-year mortgages to 50-year terms to lower monthly payments – an idea criticized by housing economists who argue it would significantly reduce homeowners’ ability to build equity and accumulate wealth.

The effectiveness of Trump’s proposed institutional investor ban remains questionable. According to an August analysis by researchers at the American Enterprise Institute, a center-right Washington think tank, institutional investors account for merely 1% of total single-family housing stock nationwide. The analysis defined these investors as entities owning 100 or more properties.

Regional variations exist in institutional ownership rates – reaching 4.2% in Atlanta, 2.6% in Dallas, and 2.2% in Houston. However, even in these markets, corporate investors typically don’t dominate neighborhoods, though they tend to concentrate purchases in lower and middle-income communities.

Housing affordability has increasingly become a bipartisan concern, with several Democratic lawmakers also calling for restrictions on corporate home ownership. Senator Elizabeth Warren (D-Mass.) criticized the administration’s approach on Wednesday, telling reporters that Trump could actually cause housing prices to increase by allowing real estate companies Compass and Anywhere to merge.

“He’s feeling the heat because the American people want to see us lower the cost of housing, and it is Democrats who are committed to getting that done,” Warren stated.

The Senate passed a bipartisan bill sponsored by Warren in October that would create incentives for local governments to streamline zoning regulations to increase housing supply. However, the measure has stalled in the Republican-controlled House.

Housing economists point to the construction shortage as the market’s most significant challenge. Goldman Sachs estimated in October that relieving cost pressures would require building 3 to 4 million additional homes beyond normal construction levels. Compounding the problem, mortgage rates climbed significantly during post-pandemic inflation, causing monthly payments to increase at rates far outpacing income growth.

Trump acknowledged this construction dilemma in previous remarks, noting that increasing housing supply creates a conflict between helping new buyers and protecting existing homeowners’ equity.

“I don’t want to knock those numbers down because I want them to continue to have a big value for their house,” Trump said last month. “At the same time, I want to make it possible for young people out there and other people to buy housing. In a way, they’re at conflict.”

As the election approaches, housing affordability remains a critical economic issue for voters across the political spectrum, with both parties scrambling to present viable solutions to an increasingly complex market challenge.