New plans from the White House may soon prevent numerous companies from acquiring multiple homes at the same time, all in the name of safeguarding the American dream of homeownership.
Companies have been on edge, waiting for clarity since President Trump declared last month that he intended to curb the practice of institutional investors snapping up homes—something critics say makes housing unaffordable for everyday buyers.
According to recent comments from the White House, there’s a push to prohibit any institutional investor owning over 100 homes from purchasing additional single-family properties. This was reported by a memo that was shared with Congressional leaders on Thursday.
It appears the scope of the plan may be more extensive than many anticipated. Some investors thought the limitations might only apply to those with portfolios exceeding 1,000 homes.
Mid-tier investors could be quite displeased, as this sweeping ban could block numerous investment firms from acquiring single-family homes in the country.
Yet, there are notable exceptions, particularly for investors who either build or renovate properties specifically intended for rental.
“The President has made it clear that he is dedicated to making home buying affordable again, with a significant part of it being his favored plan to limit large institutional investors from buying single-family homes,” stated White House Press Secretary Davis Engle.
Engle noted that the White House appreciates the bipartisan cooperation as Congress deliberates housing policies.
In recent weeks, the Trump administration has urged lawmakers to incorporate the new homebuying ban into any housing policies under discussion.
However, Democrats have started to voice their objections, claiming the proposal comes with too many loopholes to be effective, suggesting some investors should be asked to divest existing properties.
Another aspect of the proposal would give Treasury Secretary Scott Bessent authority to define what constitutes a “large institutional investor” and to adjust the criteria as he sees fit.
The White House has already submitted a proposal to both the Senate Banking Committee and the House Financial Services Committee for their input.
Housing advocates warn that corporate ownership could restrict supply and initiate price hikes, making it even harder for struggling families to own homes.
The situation might be even more pronounced in certain urban areas where investment firms historically own a larger portion of primary housing, like Houston, Miami, and Phoenix, particularly during the pandemic.
Yet, some detractors argue that this ban might not significantly affect most American homebuyers, as those companies managing 100 or more single-family homes hold just 2% of the total housing market, according to John Barnes Research and Consulting.
Over the past decade, large investors and private equity firms have purchased many single-family homes.
Back in the wake of the 2008 financial crisis, financial firms swiftly acquired properties at foreclosure auctions after prices sank.
Often, major Wall Street players arrived with substantial all-cash offers, making it nearly impossible for first-time buyers to compete.
In a related effort to combat the housing price surge, President Trump has ordered $200 billion worth of mortgage bond purchases to bolster lending, potentially increasing cash flow and lowering interest rates.
