Today’s edition sponsored by: JPI, Madera Residential, Foxen, Authentic, Landing and Mason Joseph.
“People live in homes, not corporations.” (PSA: Renters are people, too!)
Here’s everything we know (so far!) about President Trump’s plan to ban “institutional investors” from buying single-family homes.
First, and foremost, you should know this proposal is based on the popular myth that investors are pushing more homes into the rental market. In fact, it’s the opposite. We’ve LOST 1.5 million single-family rental homes, on net, since 2016, as individual homebuyers have outmuscled investors for market share. Don’t just take my word for it. John Burns and the Harvard Joint Center for Housing Studies have said the same thing.
Why isn’t this fact more widely known?
Burns wrote in 2024: Starting in 2016, “the number of rental homes in America began declining as many smaller investors sold their homes for a profit. This decline received almost no attention in the press.”
And yet here we are. A (very unscientific) survey on X by housing reporter Lance Lambert showed nearly two-thirds of respondents having either a “very favorable” or “somewhat favorable” reaction to the announcement.
Much of this enthusiasm seems rooted in “I don’t like institutional investors and/or renters” given there’s still major hurdle for homebuyers facing >$1k/month in additional costs vs renting + down payment while hoping the removal of 0.5% of buyer pool magically helps out.
And there’s this: “People live in homes, not corporations” is a catchy soundbite. But aren’t renters people, too?
(Keep reading below)
Is it an executive order or is it proposed legislation?
It might be both. Trump’s post said he is “immediately taking steps to ban large institutional investors from buying more single-family homes” and then adds he will be “calling on Congress to codify it.”
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FHFA Director Bill Pulte specified on Fox Business that Trump would indeed issue an executive order and then ask Congress to codify it.
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Also, Pulte said on CNBC that the White House has “a lot of tools we can utilize” to enforce such a ban, suggesting that an executive order of some sort could be on the table.
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Of course, we don’t know the specifics of such an unprecedented executive order – or the legality of it.
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Trump is scheduled to share more details — and a broader plan to boost housing — at a speech in Davos sometime during the week of January 19.
Who exactly would be banned from buying single-family homes?
We don’t know specifics. Trump only said “institutional investors,” which we’d traditionally think of as groups with 1,000+ homes.
Others have used the word “corporations,” but that is a very broad term inclusive of mom-and-pops who use LLCs for the liability protections that structure offers. The White House could also pitch a definition that lands somewhere in between.
Even so, mom-and-pop investors still dominate the SFR market with ~90% market share – and there appears no to be no political appetite to go after that group.
How many homes are impacted?
There’s a lot of confusion over this topic because many people are confusing three different numbers:
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Institutional investors have 2-3% of the SFR market. That number is commonly cited, BUT it overstates institutions’ role in the broader housing market.
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Institutional investors’ share of the TOTAL single-family home market is somewhere around ~0.7%. Institutions own somewhere around 600k homes of the 87 million total single-family homes. (By the way: 600k amounts to LESS than the number of new single-family homes we build in a year. So while it’s a big number, it’s a volume that could be (and is) offset by less than a year’s worth of new homes.)
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Institutions comprise an even smaller share (0.5%) of total home sales in recent years.
So, what’s the real impact?
Well, Trump’s words suggest he’s not going to try to force institutions to sell — only to block them from buying more homes. So that would be 0.5%.
BUT it’s probably even LESS than 0.5%
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That 0.5% is just acquisitions. Net flows (including dispositions) are more important. And those numbers would be much smaller — if not negative. As Lance Lambert reported: “Lately, more institutional landlords have been net sellers than net buyers.”
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PLUS many institutional investors aren’t even buying individual homes at all, favoring bulk acquisitions of SFR portfolios and partnerships with homebuilders. The nation’s largest SFR owner, Pretium (Progress Residential), said they don’t buy off the MLS at all — and therefore aren’t competing with individual homebuyers.
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PLUS it’s very unlikely all the homes bought by institutional investors would otherwise gone to individual homebuyers, given that smaller investors could fill that tiny gap, too — especially for undervalued homes in disrepair that investors favor.
Bottom line: This ban is one of those things that will generate a lot of buzz … but, objectively, near zero boost for homebuyers looking for homes.
Nor does it solve for the far greater challenges facing would-be homebuyers unable to qualify for a mortgage or find enough cash for a down payment.
Will this stop BlackRock?
Ok, that was a joke. Everyone’s favorite social media myth — that BlackRock (which owns zero single-family homes) is buying all the single-family homes.
They usually mean not BlackRock, of course, but Blackstone. And for their part, Blackstone said they’ve been “a net seller of homes over the last decade — with our holdings down over one-fifth.”
What would it do for affordability?
Nothing for homebuyers, absent separate actions.
But even if institutional investors stop buying homes, it wouldn’t help most renters buy them instead. Think of all the headwinds still facing would-be buyers:
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It costs >$1k more in monthly costs to buy a starter home than to rent a comparable home, according to John Burns Research and Consulting.
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You still have to qualify for a mortgage, and many renters do not. Pretium Co-President Stephen Scherr said that “more than half of the adult pop in the United States would not qualify for a mortgage, and so we need to provide good quality affordable housing — both to those who own and for those who rent.” Scherr said Pretium’s typical renter household makes $130k in income yet 90% of them cannot qualify for a mortgage.
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Plus you need sufficient cash on hand for a down payment.
Amherst CEO Sean Dobson said on Bloomberg TV: “All [the ban] does is make it more difficult for platforms like ours to provide more housing opportunities to that cross section of the population that is not served by the mortgage market … When we sat down with the most ardent critics of our business and they really understood the financial profile of the customer we serve — someone with a 625 FICO who’s living in a $350,000 house for $2,000 month, they realize there’s no better solution than the one we provide.”
What about new construction and built-to-rent (BTR) homes?
That’s apparently on the table for banning, too. Specifically, that would primarily stop homebuilders from pre-selling individual homes to SFR companies, as some do as a way of hedging risk and getting some guaranteed revenue. It also provides an exit for new homes sitting on the market.
Here’s what Bill Pulte said on CNBC: “They are also buying a lot of homes from the homebuilders. And it’s our opinion – certainly my opinion – that new homes should go to people, not to corporations.”
(Again, a sidenote: Aren’t renters people, too???)
Pulte also said: “There’s been this whole thing also where corporations have been able to get better deals from homebuilders. Homebuilders need to be focused on providing homes for people, not for corporations … I would encourage people not engage in this type of behavior. We have a lot of tools we can utilize. It’ll be up to the president to decide what if any he wants to use with Fannie and Freddie. But we stand ready to make sure this happens.”
I wrote on LinkedIn why that’s a bad idea.
What about BTR communities?
It’s unlikely such a ban could apply to BTR communities if on a single land parcel. That type of BTR is more like an apartment community, just with single-family homes (of various types). Just like with apartments, those homes couldn’t be sold off individually unless the owner converted the entire community to a condo structure.
However, it’s theoretically possible that the FHFA could order Fannie Mae and Freddie Mac to blacklist BTR communities. That wouldn’t kill BTR, but it would deal a significant blow to the liquidity of such projects. Such an action seems highly unlikely.
Would SFR owners be forced to sell homes they currently own?
Anything is possible, but there’s no indication that’d be the case. While previous Senate legislation sought to add punitive tax burdens on institutional SFR investors to encourage sales, Trump specifically said he wanted to ban institutions from “buying more single-family homes.”
But the National Association of Realtors put out a statement encouraging policymakers to incentivize investors to sell off homes. That would certainly boost commissions.
What has been the reaction from housing experts and economists?
The proposal has been widely panned by economists and housing analysts. The Washington Post reported: “Many economists from the right and left alike say investors don’t have as large a grip on the housing market as politicians might suggest.”
How are institutional SFR investors responding to the news?
They obviously don’t like it, but most have stayed quiet — including both SFR REITs (which have both pivoted in recent years more toward BTR construction and away from buying existing homes individually). But a few other SFR players have spoken up.
Amherst CEO Sean Dobson said on Bloomberg TV: “Banning investors from putting capital in the housing market is not going to make affordability any better,” and could make it harder for people who don’t qualify for mortgages to find a home.
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Dobson said: “All it does is make it more difficult for platforms like ours to provide more housing opportunities to that cross section of the population that is not served by the mortgage market. And that’s what we do, and that’s what we’re going to continue to do … When we sat down with the most ardent critics of our business and they really understood the financial profile of the customer we serve — someone with a 625 FICO who’s living in a $350,000 house for $2,000 month, they realize there’s no better solution than the one we provide.”
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“Mortgage rates went from 3% to 7%, and that made housing unaffordable for a vast cross-section of the population … It takes a very high FICO score and a very high down payment… If people can’t get mortgages, it doesn’t matter what the house costs. They aren’t going to be able to buy it.”
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“Large investors make for fun scapegoats. But the hard truth is there are real families that might be affected by this,” and noted many of their renters wouldn’t be able to live where they are if single-family rental homes are not available.”
Pretium (parent company of the nation’s biggest SFR owner, Progress Residential) emphasized the role of SFR in providing quality homes in good neighborhoods for families unable to qualify for mortgages.
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Pretium’s Co-President Stephen Scherr said on CNBC: “To push private capital out will only worsen the problem, not make it better.”
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Scherr said their typical renter households have incomes of $130k, and yet 90% of them do not qualify for a mortgage. More broadly, “more than half of the adult pop in the United States would not qualify for a mortgage, and so we need to provide good quality affordable housing — both to those who own and for those who rent.”
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Scherr also said: “The notion that we are boxing out individuals wanting to buy a home is old. We’re not buying homes off the MLS. We are not buying one by one. We are buying homes in portfolios that are sold to us. We are buying homes from homebuilders,” and noting those partnerships help homebuilders de-risk new developments that are predominantly homes sold to individual buyers.
Blackstone said they’ve been “a net seller of homes over the last decade — with our holdings down over one-fifth.”
The National Rental Home Council, an SFR trade group, put out a statement saying: “Professional single-family housing providers represent a small segment of the overall housing market, and the single-family rental industry remains focused on supporting renters while also supporting pathways to homeownership.” The group later added a more detailed statement, saying: “Limiting investor participation does nothing to solve the underlying property of housing affordability. The high cost of buying home is due to limited supply – and limiting investors will not increase the number of homes on the market.”
— My Latest Posts on LinkedIn —
Here are some recent posts if you missed them:
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The U.S. lost 1.5 million single-family rental homes between 2016 and 2023.
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FHFA Director Bill Pulte wants the ban on institutional homebuying to extend to new home construction.
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It’s report card time! Looking back at my predictions for 2025.
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Too often people say, “We don’t need more luxury apartments.” But if you care about affordability, then you do! Recent evidence shows why.
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If Massachusetts voters approve a rent control ballot measure in November 2026, it would reset rents back to January 2026. A recent poll shows voters favoring it.
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An easy prediction for 2026: Apartment absorption will go down, even if the job market materially improves.
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Dallas is booming, but its downtown is not.
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CPI rent inflation fell below 3% for the first time since the pandemic. While the CPI did have some data collection issues, there’s no doubt that rent growth (in the real world, too) continues to cool off.
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Aimco — once the nation’s largest apartment owner — sold off one of the remaining fragments of its portfolio and it winds down toward liquidation.
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Atlanta is looking like an early frontrunner in the search for green shoots of recovery in the supply-drenched Sun Belt.
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Kudos to The Wall Street Journal (news section, not op-ed!) for spelling out how rent control has backfired in St. Paul, Minnesota.
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After enacting rent control in July 2024, the affluent D.C. suburb of Montgomery County (MD) has seen multifamily building permits go poof.
— Now Spinning on The Rent Roll Podcast —
For 2025, The Rent Roll with Jay Parsons podcast ranked in Spotify’s top 2% of podcasts for minutes played and in the top 1% for most shared shows. Additionally, The Rent Roll continues to frequently rank on Apple’s charts for investing-themed podcasts, and was recently ranked as the third-best podcast in all commercial real estate (and #1 in housing) by the readers of CRE Daily!
Thank you to everyone who’s made The Rent Roll part of your weekly routine! New episodes are released every Thursday morning. No episode this week due to Christmas week, but we’ll be back on January 1 with our 2026 predictions alongside John Burns himself of John Burns Research & Consulting.
Find us on YouTube, Spotify, Apple and Amazon. Recent episodes:
Episode 66: Q1’26 SFR/BTR Update and Outlook with NexMetro’s Josh Hartmann
Episode 65: 15 Predictions for Apartments and SFR in 2026 with JBREC’s John Burns
Episode 64: What I Got Wrong (and Right!) in 2025 … Plus a multifamily capital markets update with Newmark’s Mike Wolfson
Episode 63: Green Shoots in Multifamily? Maybe. With CAPREIT’s Andrew Kadish
Episode 62: How Greystar Sees Property Management with Greystar’s Toni Eubanks
Episode 61: A.I. and Rental Housing with Funnel’s Tyler Christiansen
Episode 60: Overlooked Tertiary Markets with Centerspace’s Anne Olson
