President Trump recently announced a new initiative in an attempt to loosen America’s tight housing inventory. His idea is to prohibit large investment companies from buying single-family houses moving forward. So, would this rule actually move the needle and make homes more affordable for families? Here’s what experts believe.
Trump’s proposal on Truth Social was a ban on large institutional investors from buying more single-family homes. The president believes removing private equity firms and similar investors from the market will allow more first-time home buyers to enter the market.
A 2024 report by the Government Accountability Office said that institutional investors “may have contributed to increasing home prices and rents and helped stabilize neighborhoods following the financial crisis.” However, the impact on “homeownership opportunities” was unclear.
Cotality, a real estate analytics firm, reported in November that investor activity rose from 29% in June 2025 to 30% in September 2025.
“This upward trend continues to build on the elevated market share controlled by investors since late 2024 and represents a year-over-year increase of three percentage points,” the analysis found.
Yet, the impact of Wall Street investors, such as private equity firms, is a matter of debate. Investment groups may not be as threatening to the would-be home buyer as some think.
In an October 2025 analysis, Realtor.com said, “Even in states with the highest rates of investor ownership, it’s not institutional buyers driving the trend.”
More than 90% of investor-owned single-family homes were in the hands of small investors who owned less than 11 properties, Realtor.com noted, referring to data from CJ Patrick Co. and BatchData.
The states with the largest share of investor-owned homes included Maine, Montana, Alaska, and Hawaii.
“Yet the overwhelming majority of that housing stock is in the hands of individuals and small partnerships, not mega investors,” the real estate association reported.
While investment activity may have played a part, the housing shortage has evolved from more than one contributing factor. Higher home prices and elevated mortgage rates are surely in the mix.
Another — and surprising — pressure point may be locally based.
Research from Wharton real estate professor Joseph Gyourko and Harvard economics professor Edward Glaeser points to the tightening of local building restrictions.
The professors found that while home building boomed in the 1950s and ’60s, over the next three decades, construction fell by half. That trend continues today.
Local governments, particularly in the Sunbelt, are hampering home construction with restrictive zoning and permitting laws to “slow and stop new developments,” the research concluded.
“I think the most important thing is change at the local level,” Gyourko said. “There has to be a recognition that these high prices are largely — not totally — due to restrictive permitting and higher regulation at the local level.”
The matter of regulatory burdens resonated with Ed Brady, the president and CEO of the Home Builders Institute.
“That is probably very close to the top of the list of challenges with communities that are struggling with affordability — restrictions put on by cities, states, or municipalities,” Brady said. “That is the reason that 25% of the cost of a single-family home in America is regulatory issues — $100,000 of a $400,000 house is a regulatory burden, soft costs that don’t go into the sticks and bricks of the construction. That’s a huge burden.”
What would be the impact of less institutional home investing?
“It would likely put downward pressure on prices by reducing demand in the market,” said Cotality principal economist Thom Malone. “However, institutional investors historically account for only a small share of total home purchases — around 1% to 2% — so the overall impact on prices would probably be modest.”
Malone also noted that restricting institutional activity would reduce supply in the single‑family rental market, which would likely make it more expensive to rent. “There is also the question of how builders would respond: With fewer buyers, construction activity could slow, blunting any downward pressure on home prices,” Malone added.
Realtor.com senior economist Jake Krimmel believed the Trump proposal is unlikely to move the needle on affordability.
“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,” Krimmel said. “Large corporate ownership is a red herring in the broader supply debate.”
While Trump’s initiatives certainly feed the “somebody has to do something” frustration of hopeful home buyers, no one disputes that the housing shortage will demand more than one solution.
“You’re not going to get an overnight fix on the affordability issue,” HBI’s Brady said. “We’ve lost a big segment of the population that has been the traditional first-time home buyer because they can’t afford it. With regulatory burdens, land use, tariffs, trade, all those things, it’s a perfect storm where the price of housing is just too high.”
Any effort by the government or the housing industry to expand home affordability is worth keeping tabs on. In the meantime, you can tip the scales of owning a home in your favor by taking some empowering action of your own.
Save more for a down payment. With more money down, you will get a lower interest rate and more favorable loan terms.
Reduce debt. A lower debt-to-income ratio (DTI) will make you a more attractive borrower.
Shop with several mortgage lenders. Apply for preapproval with three or four lenders to compare not just their interest rates, but also their fees. This strategy helps you find the best deal.
Know your credit score. While there are many credit scoring models, knowing your score from any one of them will help you set your expectations for the interest rate you may earn. You can also track the savings you might gain by improving your score.
Explore loan options. Government home loans, such as FHA, USDA, or VA mortgages, can enhance affordability by allowing lower down payments and flexible credit hurdles.
See if you qualify for home-buying assistance programs. Down payment assistance programs and closing costs grants are available to households in specific areas and within qualifying income limits.
Look for interest rate buydowns. Some lenders and new home builders offer limited-time rate discounts. You can also run the numbers on buying discount points to lower your mortgage rate.
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