U.S. President Donald Trump’s executive order restricting Wall Street investors from purchasing single-family homes has triggered debate among investors. The order, announced at the World Economic Forum, aims to make homes more affordable by reducing competition from large investment firms. It directs regulators to promote sales to individuals and prevent federal programs from facilitating sales to Wall Street. Blackstone is a global investment firm, and American Homes 4 Rent operates as a real estate investment trust (REIT).
While the administration hopes to ease affordability concerns, some investors argue the order may exacerbate the issue by boosting demand without addressing the underlying problem of tight housing supply. They contend that the core issue is not a lack of demand but a shortage of available homes. Without a significant increase in housing construction, curbing institutional investment could potentially drive prices even higher.
Experts note the federal government’s limited power to substantially increase housing supply, as regulations are primarily controlled by local governments. Policies that boost demand without increasing supply could lead to price increases, according to Michael Rosen, chief investment officer at Angeles Investments. Jim Tobin, CEO of the National Association of Home Builders, stated his organisation has been pushing policies to lower the cost of housing production, and that corporate investment has driven new home construction.
Despite the concerns, some investors see potential opportunities in housing stocks, particularly if the new policies succeed in boosting home ownership. Greg Halter, director of research at Carnegie Investment Counsel, suggests that such policies could be significantly beneficial for the markets. Shares of Blackstone were last up 2.2%, while American Homes 4 Rent was trading nearly 1% higher.
