U.S. President Donald Trump announced on Wednesday his administration is moving to ban Wall Street firms from purchasing single-family homes, a move designed to lower housing prices. Trump stated on Truth Social that he is taking immediate steps to implement the ban and will urge Congress to codify it into law. The proposed ban has already impacted the stock prices of companies involved in the single-family rental market.
Shares of American Homes 4 Rent, a real estate investment trust that focuses on acquiring, developing, renovating, leasing, and operating single-family homes as rental properties, fell to a near three-year low before closing down 4%. Blackstone, a global investment business that invests capital on behalf of pension funds and other investors, saw its shares hit a one-month low, closing down about 5.6%. A Blackstone spokesperson stated that their ownership of single-family homes represents a small portion of their overall business and that they have been net sellers of homes for the past decade. They also said their current portfolio is positioned to continue performing well.
Trump criticised corporate home buying, echoing concerns that it has inflated housing costs, noting that owning a home was once the ‘pinnacle of the American Dream’ now out of reach for many. Institutional investors owned approximately 450,000 homes, about 3% of all single-family rental homes nationally, as of June 2022, according to a study by the Government Accountability Office (GAO). The GAO study also indicated that the effect of institutional homebuying on homeownership opportunities was unclear due to limited data.
Critics argue that Wall Street firms are also negligent landlords, cutting back on maintenance to please investors, and wrongly evicted tenants during the COVID-19 pandemic. While the details of Trump’s plan and its legal basis remain unclear, the announcement has already sent ripples through the housing market and sparked debate about the role of institutional investors in the housing sector. The White House did not immediately respond to requests for comment.
