President Donald Trump announced on Jan. 7 plans to ban institutional investors from buying up homes and renting them back to Americans.
You’ll Own Something and Be Happy
Corporate landlord Blackstone’s stock plunged nearly 5% on the move to make housing more affordable.
Trump’s goal is to lower house prices and prevent Wall Street outbidding the rest of us with their unfair access to cheap capital.
And it’s something a lot of Americans have wanted, from the MAGA base to Bernie Bros.
Home ownership has long been a bipartisan goal, as it promotes family formation, promotes community involvement, and lets people build a nest egg.
A recent study found the average net worth of an American homeowner is close to $400,000. The average net worth of an American renter is $10,000.
Ten grand makes for a thin retirement.
The problem, of course, is Americans can no longer afford houses that skyrocketed in price to almost 40% under Biden. Toss in Federal Reserve rate hikes that doubled mortgage rates and, according to Bankrate, the median monthly mortgage payment, which doubled from $1,242 a month in 2019 to $2,207 in 2024.
This then bled to rents—landlords have mortgages too.
Meanwhile, wages for twentysomethings—who should be starting a family—actually went down under Biden. And have only made back part of the lost ground.
This put institutional buyers in the spotlight, who have spent decades quietly hoovering up millions of homes to rent. The buying accelerated dramatically during COVID’s low rates—at one point in 2022 institutions were buying one in four single family homes.
Banning institutional banners will lower prices. But not by much considering they make up just a couple percent of home purchases. So going by price elasticities you might get a 3-5% drop in home prices—possibly closer to 10% in sunbelt cities where institutions are most active.
But this comes with a roughly equivalent 3-5% rise in rents if Blackstone drops the rental business, where price elasticities are similar.
So, slightly cheaper houses, and slightly higher rent.
Both nudge people into owning. At the expense of people with poor credit or no downpayment who will pay more rent.
Moreover, we’re talking 3-5% when houses went up 40% and housing costs doubled.
Buyers need a lot more.
Since he took office in January 2025, Trump’s been trying everything. He’s tried to cut closing costs, promoted simplified local building codes, removed tariffs on construction materials, proposed opening federal land to housing. Additionally, just this week, he deployed $200 billion from government-controlled mortgage giants Fannie Mae and Freddie Mac to lower mortgage rates.
In the Big Beautiful Bill, he added tax relief for builders, which is already helping multi-family construction. He even floated 50-year mortgages, which lower payments at the cost of paying your mortgage when you’re 92.
And, of course deportations, which have opened over a million houses and are finally lowering rent prices, especially in deportation-heavy cities like Austin.
What’s missing is the two biggest drivers of house prices: inflation, which is driven by federal deficits.
And mass deregulation in home-building, including environmental mandates, zoning, and rent control the National Association of Homebuilders estimates can add $94,000 to the cost of a home.
For these, he needs Congress. Along with local governments like New York or San Francisco, where rent control has led to over a hundred thousand empty units despite citywide shortages and nosebleed rents that delivered New York to Comrade Mamdani.
Affordability and inflation have been the top voter concern all year, and prediction markets currently have 77% odds the GOP loses the House in the midterms.
Given Congress won’t meaningfully cut inflationary spending or regulation in areas like healthcare and insurance, housing costs are the last man standing.
Trump’s doing what he can, but Congress has to do the heavy lifting if they want to keep their seats.