President Trump signed an executive order Tuesday aimed at stopping Wall Street firms from buying up single-family homes, a move he says will make housing more affordable for American families.
The order, titled “Stopping Wall Street from Competing with Main Street Homebuyers,” gives federal agencies 60 days to draft new restrictions or revise existing rules governing institutional purchases of single-family homes.
“To preserve the supply of single-family homes for American families and increase the paths to homeownership, it is the policy of my Administration that large institutional investors should not buy single-family homes that could otherwise be purchased by families,” Trump wrote in the order.
Trump also instructed the Justice Department and the Federal Trade Commission to review large-scale acquisitions of single-family homes for potential antitrust violations.
The agencies were ordered to prioritize enforcement actions against “coordinated vacancy and pricing strategies” by large institutional investors in local rental markets.
Trump directed his administration to work with lawmakers to draft legislation that would codify restrictions on large institutional investors, signaling the White House wants the limits to outlast his term and survive future administrations.
Any bill would require congressional approval, setting up a potential fight on Capitol Hill over how far the federal government should go in curbing Wall Street’s role in the housing market.
An analysis by law and consulting firm CliftonLarsonAllen said a nationwide ban would require congressional action, writing: “A nationwide acquisition restriction requires statutory authority and cannot be implemented through executive action alone.”
“Congressional legislation would be necessary to establish the legal basis for any federal ban,” the law firm wrote.
Wall Street giants including Blackstone, American Homes 4 Rent and Progress Residential bought thousands of single-family homes following the 2008 financial crisis, snapping up distressed properties and converting them into rentals.
Despite their high-profile role in the housing debate, large institutional investors own only a sliver of the nation’s single-family housing stock.
Firms that own 100 or more homes control less than 1% of all single-family houses nationwide, according to data from the American Enterprise Institute.
Even within the rental market, large institutions account for just 2% to 3% of single-family rental homes.
That ownership, however, is highly concentrated geographically.
In fast-growing Sun Belt markets, institutional investors control large clusters of homes, giving them an outsized footprint in certain metro areas even as their national share remains small.
In 22 specific US counties, institutional investors own between 5% and 10% of the housing stock. Those counties are concentrated in metro areas including Dallas, Houston, Atlanta, Phoenix, Jacksonville, Fla.; Charlotte, NC; Tampa, Fla.; and Memphis, Tenn.
By contrast, investors of all types — including mom-and-pop landlords — own roughly 20% of single-family homes overall and accounted for about one-third of home purchases in the second quarter of last year.
