Trump's Plan to Ban Big Investors from Buying Homes: A Well-Intentioned Mess That Won't Move the Needle
Look, I get the appeal. Housing feels impossible right now—prices are nuts, inventory's thin, and people are pissed. So when Trump announced on January 7, 2026, that he's taking steps to ban large institutional investors from buying more single-family homes—and calling on Congress to make it law—it lands as a direct shot at the idea that Wall Street is pricing out regular buyers. "People live in homes, not corporations," he said (CNBC, 2026; Reuters, 2026).
But as someone who originates mortgages, plans finances, and leans hard into Austrian economics, this feels like the wrong fix. It's not just probably tough to enforce or legally dicey—it's that it ignores the core issue: not enough houses. Full stop.
The Numbers Don't Back the Hype
Large institutional investors (think Blackstone, Invitation Homes, firms with thousands of properties) own a tiny fraction of the single-family market. Recent data shows they account for about 3% of single-family rentals nationally, with the biggest players holding well under 1% of all single-family homes overall (Ellen & Goodman, 2023; Urban Institute, 2023). Mom-and-pop investors still dominate, owning the vast majority. All investors combined (big and small) bought around 30% of homes in early 2025, but the large institutions are a sliver of that (Picciotto, 2025; Goodman et al., 2023).
So banning the big guys might ding a few stock prices and score political points, but it's not going to suddenly open up a flood of homes for first-time buyers. The crisis isn't driven by corporate overlords gobbling everything—it's a supply problem that's been building for years.
Property Rights: The Line We Don't Cross Lightly
This is where the Austrian side of me gets animated. The foundation of a free economy is the right to buy, sell, and use your property without government dictating who can bid. Telling a seller they can't accept an offer from a corporation because a politician dislikes the buyer? That's classic interventionism—the kind Ludwig von Mises warned spirals into more control. Friedrich Hayek put it best: "The system of private property is the most important guarantee of freedom, not only for those who own property, but scarcely less for those who do not" (Hayek, 2007, p. 136).
Restrict who can buy based on their corporate status, and you're chipping away at the rules that let markets function efficiently. It opens the door to more distortions, higher costs, and less innovation. If we're okay with this, why not restrict car sales, stock trades, or business purchases the same way? It's a slippery slope nobody serious wants.
The Real Issue: A Massive Supply Shortage
We're short somewhere between 3-5 million housing units, with estimates around 3.8-4.7 million depending on the source (Realtor.com, 2025; Zillow, 2025; Goldman Sachs, 2025). This didn't happen overnight. The Great Recession crushed building for a decade, COVID added supply-chain chaos and labor shortages, and zoning/red-tape barriers make new construction slow and expensive everywhere.
Builders are risk-averse for good reason—high rates, permitting delays, NIMBY fights. You don't solve affordability by shrinking the buyer pool; you do it by making it easier and more profitable to add supply.
Why This Could Backfire
Ironically, institutional investors often stabilize markets: they buy in bulk, renovate distressed properties, and provide rental options that ease pressure on ownership prices. Some studies show they can push prices up locally in tight markets, but others note they boost supply of rentals and reduce vacancies (Gurun et al., 2023; Gorback et al., 2025; Coven, 2025). Pulling them out risks softer prices for sellers (bad if you're upsizing or downsizing) and even less incentive for new builds when demand looks thinner.
This isn't to say corporate landlords are flawless—there are real complaints about rent hikes and maintenance in some areas (Raymond et al., 2016). But at the national scale, they're not the villain behind the affordability crisis. Blaming them is misdirection from the hard work of zoning reform, faster permits, and builder incentives.
A Smarter Path Forward
If we want real progress, let's lean into markets: deregulate land use, streamline approvals, and create incentives for construction. That's the play that actually addresses supply without trampling rights or liquidity.
Thoughts? Drop them on X (@gbb70) or LinkedIn—happy to hash this out. In the meantime, if you're buying, selling, or investing right now, let's focus on solutions that work, not headlines.
Stay sharp out there.
References
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www.cnbc.com/2026/01/07/trump-housing-affordability.html
Coven, J. (2025). The rise of institutional investors in the U.S. rental housing market. Journal of
Policy Analysis and Management. https://joshuacoven.github.io/assets/JoshuaCovenJMP.pdf
Ellen, I. G., & Goodman, L. (2023). Single-family rentals: Trends and policy recommendations.
The Hamilton Project, Brookings Institution. https://www.hamiltonproject.org/wp-content/
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Picciotto, R. (2025, July 27). With individual home buyers on the sidelines, investors swoop into
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home-buyers-on-the-sidelines-investors-swoop-into-the-market-f0daf356
Raymond, E., Duckworth, R., Miller, B., Lucas, M., & Pokharel, S. (2016). Corporate landlords,
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Realtor.com. (2025). 2026 housing market outlook. https://www.realtor.com/news/trends/home-
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single-family-homes-trump-says-2026-01-07/
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https://www.urban.org/research/publication/profile-institutional-investor-owned-single-family-
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