CBS News | Megan Cerullo
President Trump renewed his call to ban institutional investors from buying single-family homes during his State of the Union address on Tuesday, the same day Democrats offered their own proposal to crack down on the practice. But experts say neither plan is likely to do much to make homes more affordable.
Mr. Trump first floated the idea last month in a social media post, proposing to bar institutional investors that own 100 or more homes from buying single-family properties and writing that “people live in homes, not corporations.” Democrats, for their part, introduced a bill that would limit certain tax deductions for large-scale homebuyers.
While both approaches aim to improve housing affordability, experts say they fall short of addressing the core driver of rising prices: a shortage of homes. Homebuilding cratered after the Great Recession of 2008-09 and has yet to catch up with demand.
The U.S. would need to build as many as 4 million additional homes beyond the normal pace of construction to significantly reduce the housing shortage, according to a Goldman Sachs estimate.
“The core problem is that we don’t have enough supply, and neither proposal really solves this core issue,” Alex Blackwood, CEO of Mogul, a real estate investment startup, told CBS News.
Where Trump’s proposal might help
In his State of the Union speech, Mr. Trump touted his January executive order to ban institutional investors from buying homes, blaming such firms for driving up home prices. He pointed to Raysall Wiggins, whom he described as a mom of two from Houston who had been stymied in her efforts to buy a home.
“She placed bids on 20 homes and lost all of those bids to gigantic investment firms that bypassed inspection,” Mr. Trump said in the speech. “Paid all cash and turned those houses into rentals, stealing away her American dream.”
He added, “And now I’m asking Congress to make that ban permanent, because homes for people — really, that’s what we want. We want homes for people, not for corporations.”
Reached for comment, the White House referred to Mr. Trump’s remarks on housing affordability during his State of the Union speech.
To be sure, Mr. Trump’s proposal could have a greater impact in cities where institutional investors have a large footprint, which include Wiggins’ home city of Houston, as well as Atlanta and Charlotte, North Carolina, experts said.
Large institutional investors own about 3.8% of all single-family rental homes nationwide, according to a 2023 Urban Institute analysis. In Atlanta, however, investors own about 28% of such homes, compared with 20% in Charlotte and 9% in Houston.
“It would make a significant difference in these places, where it’s an outsized issue,” Colin Allen, executive director of the American Property Owners’ Alliance, a homeowners’ advocacy group, told CBS News. “But they own a small share of homes overall.”