By: Joshua Oresky
- Introduction
Considered a fundamental right by many, housing affordability ranks as one of the most pressing domestic policy issues throughout the United States. As home prices surge, rental prices increase, and the American dream of home ownership becomes more akin to an unattainable nightmare. According to a 2025 Congressional Research Service Report, existing home costs have risen to a median of $407,500, representing a 22% increase over the 2019 inflation-adjusted median of $333,634, while rents have followed a similar trajectory, climbing 48% over the same period of time.[1] These drastic price increases carry with them disparate impacts on low-income and minority communities.[2] The federal government’s own data confirms this disparity, with the United States Department of Housing and Urban Development documenting in their 2025 report Worst Case Housing Needs, that 38 affordable housing units existed for every 100 extremely low-income renter households.[3] In search of a solution for this crisis, federal policymakers have targeted their efforts toward a familiar target, the institutional investor, advancing proposals aimed at limiting or even banning corporate acquisitions of single-family homes.
- Legislative and Policy Proposals
With these affordability challenges in mind, federal policymakers have advanced a series of legislative and executive proposals targeting institutional investors in the single-family market. Responding to concerns that institutional investors were leveraging vast pools of capital to outbid ordinary families for single-family homes, the Trump Administration acted promptly to limit their abilities to acquire and finance large-scale portfolios of these properties.[4] On January 20, 2026, President Trump announced an executive order called “Stopping Wall Street from Competing with Main Street Homebuyers,” which directed federal agencies and government-sponsored enterprises from approving, insuring, guaranteeing, or otherwise assisting in the acquisition of single-family homes by institutional investors.[5] The executive order additionally directs the Attorney General and the Chairman of the Federal Trade Commission to review substantial acquisitions in single-family markets for anti-competitive effects and to prioritize the enforcement of antitrust laws.[6] While significant, the Executive Order does not resemble a complete ban, but rather a targeted restriction on federal support mechanisms that institutional investors rely upon when making large-scale single-family home acquisitions.[7]
Simultaneously, Congressional proposals have also targeted institutional investors, however, in a more aggressive manner. Particularly, on March 12, 2026, the United States Senate passed the 21st Century ROAD to Housing Act, the most significant federal affordable housing legislation in recent history.[8] The bill, co-sponsored by Senator Tim Scott of South Carolina and Senator Elizabeth Warren of Massachusetts, restricts the ability of large institutional investors that own at least 350 single-family homes to purchase new single-family homes.[9] However, the Act contains certain exemptions, including for build-to-rent developments and properties that require substantial rehabilitation, although investors would be required to sell such properties within seven years, with renters receiving the right of first refusal.[10] The legislation now returns to the House of Representatives where its ultimate passage is uncertain.[11]
- Why These Proposals May Miss the Mark
While it is clear that there is massive social and political appeal in restricting institutional investors from acquiring single-family homes, legislative and policy proposals of this sort may actually produce the unintended consequence of worsening housing affordability. This is due primarily to the economic observation that institutions serve as a source of demand for new construction single-family homes, and reducing their purchasing ability may risk declines in housing developments.[12] According to Cotality principal economist Thom Malone, restricting institutional activity would reduce supply in the single-family rental market, since there will be fewer buyers, which in turn would slow construction activity.[13] This has harsh implications for lower-income renters who depend on single-family rental housing as an alternative to purchasing homes. Correspondingly, in an open letter, 79 industry groups that represented property managers and advocacy organizations highly criticized the seven-year disposal requirement for build-to-rent properties in the 21st Century ROAD to Housing Act, claiming that it would eliminate the production of such housing.[14] Therefore, from a demand perspective, restricting institutional investment may reduce housing production at a time when the nation desperately needs it.
Additionally, the argument in support of banning or restricting institutional investment from single-family homes is further undermined by the minor role they actually play in the single-family housing market. According to the American Enterprise Institute, large institutional investors own only 0.65% of the nation’s single-family homes, and in 2024, they accounted for only 1% of homebuying activity.[15] The discrepancy between the public’s view of institutional investors as the force behind the housing crisis and their actual purchasing activity is largely overstated, mostly because of a failure to distinguish between large institutions and the small and medium-sized investors that account for 24% of single-family home purchases.[16] Thus, when considering that home prices increased by 154% nationally from 2012 to 2025, the data makes clear that supply-demand dynamics, and not institutional investors, are responsible for the housing unaffordability we currently experience.[17]
- Conclusion
As one of the most pressing social and economic issues in the United States, housing affordability presents significant and far-reaching challenges, especially for lower-income and minority communities. While policy proposals aimed at limiting or restricting institutional investors from acquiring single-family homes reflect a genuine desire to address these challenges, the available data suggests that this may do precisely the opposite. If the goal is to make housing affordable for those who need it most, policymakers must follow the evidence, even when it leads away from the easy answer.
[1] Nicholas E. Buffie et al., Housing Issues in the 199th Congress, Cong. Rsch. Serv., R48743 (2025). https://www.congress.gov/crs-product/R48743#_Toc215212303 (https://perma.cc/G5D2-ZHH6).
[2] Laura Feiveson et al., Rent, House Prices, and Demographics, U.S. Dep’t of the Treasury (Aug. 7, 2024), https://home.treasury.gov/news/featured-stories/rent-house-prices-and-demographics (“The affordability challenge is particularly severe for households of color and for low-income communities. Black and Hispanic households tend to spend higher shares of their incomes on housing than white households.”) (https://perma.cc/K7DN-HM3T).
[3] U.S. Dep’t of Hous. Urb. Dev., Worst Case Housing Needs: 2025 Report to Congress, 36 (2025) https://www.huduser.gov/portal//portal/sites/default/files/pdf/Worst-Case-Housing-Needs-2025-Report-to-Congress.pdf (https://perma.cc/E2YE-FDAP).
[4] Fact Sheet: President Donald J. Trump Stops Wall Street from Competing with Main Street Homebuyers, White House (Jan. 20, 2026), https://www.whitehouse.gov/fact-sheets/2026/01/fact-sheet-president-donald-j-trump-stops-wall-street-from-competing-with-main-street-homebuyers/ (https://perma.cc/PM8W-5RKX).
[5] Exec. Order No. 14,376, 91 Fed. Reg. 3,023 (Jan. 23, 2026).
[6] Id.
[7] Id.
[8] 21st Century ROAD to Housing Act, H.R. 6644, 119th Cong. (2026).
[9] What’s in the 21st Century ROAD to Housing Act?, Bipartisan Pol’y Ctr. (Mar. 10, 2026), https://bipartisanpolicy.org/explainer/whats-in-the-21st-century-road-to-housing-act/.
[10] Id.
[11] Kevin J. Healy et al., US Senate Advances Housing Legislation That Includes A Ban On Institutional Investors Purchasing Single-Family Homes, Mayer Brown (Mar. 13, 2026) https://www.mayerbrown.com/en/insights/publications/2026/03/us-senate-advances-housing-legislation-that-includes-a-ban-on-institutional-investors-purchasing-single-family-homes (https://perma.cc/YZ87-ZMPA).
[12] Khristopher J. Brooks, Trump Order Seeks to Ban Wal Street Investments in Single-Family Homes. Will This Make Housing More Affordable, Yahoo Fin. (Jan. 21, 2026) https://finance.yahoo.com/personal-finance/mortgages/article/will-trumps-proposed-ban-on-institutional-buyers-solve-the-housing-affordability-problem-165244941.html?guccounter=2 (https://perma.cc/8CMU-M5WC).
[13] Id.
[14] Senate Passes Bipartisan Housing Bill Targeting Large Investors and Easing Regulations, NPR (Mar. 12, 2026) https://www.npr.org/2026/03/12/nx-s1-5742566/senate-bipartisan-housing-bill-investors-ban (https://perma.cc/6BLV-CMFU).
[15] Edward Pinto & Tobias Peter, Senate Investor Ban To Cut Supply & Hurt Low-Income Families, Am. Enter. Inst. (Apr. 2, 2026) https://www.aei.org/research-products/report/senate-investor-ban-to-cut-supply-hurt-low-income-families/
[16] Id.
[17] Id.
