How banning big investors from buying homes could affect prices

• Donald Trump said he wants to ban large institutional investors from buying single-family homes.
• Mega landlords are clustered in Sun Belt cities, where the move could have a bigger impact.
• Housing industry watchers say a ban wouldn't address the root cause of rising prices: a shortage of homes.

Industry watchers on both sides of the aisle say President Donald Trump's recently announced goal of banning "large institutional investors" from buying single-family homes won't address the root cause of high home prices: a shortage of homes.

Major investors, including hedge funds and private equity firms, own hundreds of thousands of single-family homes around the US, which has raised concerns that Wall Street-backed groups are outcompeting individual homebuyers, especially first-time buyers, and driving up home prices.

These mega landlords own only a tiny fraction of the overall US housing market, although they control a significantly larger share of single-family rental homes in certain markets, particularly in the Sun Belt. Studies have found that they may have contributed to increased home prices and rents in certain areas.

A solution for high home prices and rents?

In the aftermath of the 2008 financial crisis, large investors bought thousands of distressed properties, particularly in Southeastern cities. They correctly predicted that home values and rents in many of the targeted areas would rise over time with population growth.

When the pandemic hit in 2020, and interest rates dropped, investors again snapped up thousands of homes, particularly in cities across the South and Sun Belt. This sparked alarm in communities where individual homebuyers struggled to compete with all-cash offers from major investors.

Overall, large investors own only about 2% of the single-family rental housing stock, according to a 2024 analysis by the Government Accountability Office. And since 2022, large investors have slowed their purchasing as interest rates have spiked and home prices have remained high. Some major investors have shifted their business model to buying homes in bulk directly from homebuilders, rather than purchasing them one by one.

"You're seeing this huge increase in debt costs to buy a home, and rents have softened mostly or been flat, and then with prospects of potentially declining home prices, or at least flat home prices, it's just tough," said Glenn Hull, CEO of SFR Analytics, which provides software and data tools to real estate investors and others.

Institutional investors have tended to cluster their purchases, resulting in more concentrated investments in certain neighborhoods in a handful of markets, including Atlanta, Dallas, Phoenix, Houston, Charlotte, and Tampa. The 2024 GAO report found that they own 25% of single-family rental homes in Atlanta and 21% of those in Jacksonville. Researchers have found that mega landlords may have contributed to the rise in housing costs, particularly in areas where they're heavily concentrated.

"The studies reviewed by GAO indicate that institutional investment may increase rents and home prices, particularly in places with high rates of institutional ownership," the GAO report said. It added that there are some indications that big investors are more likely to file evictions.

Still, the evidence isn't particularly strong that big investors charge more than smaller landlords, or that they outcompete other buyers.

"It is unclear whether institutional investors crowd out individual home buyers, and evidence about whether they behave differently than other landlords is thin," a 2023 report by the Brookings Institution found.

To the extent that mega landlords are hurting affordability, it's a local problem in the most affected neighborhoods, industry watchers say.

"It's not a national story," said Jason Lewris, cofounder of Parcl Labs, which tracks institutional investors in housing. "If you look within those markets, it's a handful of zip codes."

Much remains unknown about what kind of ban Trump intends to pursue. The administration hasn't defined "large" institutional investor. Trump said he would ban these investors "from buying more single-family homes," but it's not clear whether they would also be required to sell their current portfolios.

A White House spokesman, Davis Ingle, said in an emailed statement, "President Trump is committed to making it easier and more affordable to achieve the American Dream of homeownership by eliminating unnecessary red tape, increasing supply, and lowering costs."

Trump's proposed ban is part of a recent White House effort to address housing affordability concerns. The president announced on Thursday that he's directing Fannie Mae and Freddie Mac to buy up to $200 billion in mortgage-backed bonds in an attempt to bring down mortgage interest rates.

Housing economists say that banning major investors from buying additional homes would do little to improve affordability.

"Targeting a small subset of landlords without addressing underlying market conditions and policy gaps will not meaningfully improve the well-being of renters and prospective homebuyers," Jenny Schuetz, a former senior fellow focused on housing at the Brookings Institution, told the House Financial Services Committee during a 2022 hearing on corporate investors in residential real estate.

That's in part because investors don't change the demand for or supply of housing.

"The housing demand is the same regardless of whether a household rents or buys a home, and housing supply is the same regardless of whether a landlord supplies the unit or a household owns it," researchers at the Urban Institute, a nonprofit think tank, wrote in a 2024 report in which they called institutional investors a "scapegoat" that distracts from the supply shortage driving higher prices.

"Periods of rapid rent increases correspond to periods of greater household formation coupled with supply shortages, not institutional investor buyers," they added. "It is hard to argue that institutional rental operators drive up home prices over any reasonable period."

Instead, economists argue that an undersupply of homes is the major underlying reason for rising prices.

"If we actually wanted to solve that problem, bringing down the cost of home ownership, what we should be doing is increasing the supply of housing," said Daryl Fairweather, the chief economist at Redfin.

The possible winners: smaller investors

Mom-and-pop landlords and other smaller investors own the vast majority of single-family rentals in the US. Stopping a large investor from buying a home doesn't necessarily mean a first-time homebuyer or other individual would end up purchasing the house, Fairweather said. Instead, many of these homes would be snapped up by the main competitors of big investors: smaller landlords.

From the tenant's perspective, having a mom-and-pop landlord isn't necessarily better than renting a home from a large investor. And when it comes to enforcing laws that protect tenants, including fair housing laws, it can be easier to prove a pattern of behavior by larger landlords, Fairweather said.

If the federal government succeeds in passing a ban, enforcing it could be tricky. Large investors could break themselves up into smaller shell companies to avoid the prohibition, Lewris said.

There are other ways to stop investors from buying up more homes that could be more effective. One alternative is to discourage the behavior by raising property taxes on homes owned by institutional investors, thereby making the practice less lucrative, Hull and Fairweather said.

"In general, bans don't really work, because people find a way around them," Fairweather said, "but if you tax something, at least you get tax revenue out of it that could be used to support things like first-time homebuyer programs or building more affordable housing."

Renters vs. homebuyers

Investors often argue that they actually boost quality housing options for lower-income people by offering rentals in neighborhoods dominated by single-family homes. Tenants tend to have far lower incomes and wealth than homebuyers. And the neighborhoods dominated by single-family homes often have attractive amenities, including good schools and jobs.

"The narrative today is that what my business does is wrong, that buying homes and renting them is a bad thing because I'm keeping people from buying homes," Sean Dobson, CEO of Amherst, a single-family rental company heavily invested in the Sun Belt, said at the real estate conference ResiDay in November 2025. "It couldn't be any further from the truth, but it's a powerful message."

Instead, he argued, his firm helps its tenants live in homes that they couldn't afford a down payment for or wouldn't qualify for a mortgage to buy.

Fairweather agreed that banning large landlords from owning single-family homes would mean fewer tenants could live in these wealthier neighborhoods. "In a way, it boxes out renters and exacerbates some of the inequalities that exist in the country," she said.

Madison Hoff contributed to this report.