Trump announces plans to ban institutional investors from buying single-family homes

President Donald Trump on Wednesday announced plans to ban institutional investors from purchasing single-family homes in what he sees as a means of improving affordability for Americans.

Trump wrote in a post on his Truth Social platform that, "For a very long time, buying and owning a home was considered the pinnacle of the American Dream." 

"It was the reward for working hard, and doing the right thing, but now, because of the Record High Inflation caused by Joe Biden and the Democrats in Congress, that American Dream is increasingly out of reach for far too many people, especially younger Americans."

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"It is for that reason, and much more, that I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it," Trump said. 

The president added that he "will discuss this topic, including further Housing and Affordability proposals, and more, at my speech in Davos in two weeks."

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Large financial institutions like Blackstone have purchased thousands of single-family homes since the 2008 financial crisis spurred a wave of home foreclosures.

Firms are increasingly investing in rental homes, which have outperformed other commercial property sectors like offices and retail in recent years amid rising borrowing costs and shifts in work patterns.

Housing advocates and lawmakers, including Democrats, have criticized institutional landlords as having constrained the housing supply and increased rental costs for Americans.

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It's unclear what legal authorities the president will cite in his push to ban institutional firms from buying homes, or what additional measures he's pushing for Congress to take.

The president's announcement caused shares in homebuilders to plunge during Wednesday's trading session.

American Homes 4 Rent, a company that acquires homes for the rental market, saw shares fall to near a three-year low, with trading temporarily halted for volatility. The stock pared some of its losses after trading resumed and was down about 3.4% ahead of the closing bell.

The PHLX housing index was down over 2.6% on Wednesday, which was on track for its biggest single-day percentage drop since Nov. 17.

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Asset management firm Blackstone, which has invested in single-family homes, had shares fall by more than 5.9% near the end of the trading session. 

Blackstone said in a January research note that institutions own only 0.5% of all single-family homes in the U.S.