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Trump to Ban 'Large Institutional Investors' from Buying Up U.S. Homes

John Binder 3–4 minutes

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ANDREW CABALLERO-REYNOLDS/AFP via Getty Images

President Donald Trump is moving to ban “large institutional investors” from buying up United States homes meant for Americans, a move that is likely to be welcomed with bipartisan support.

On Wednesday, Trump wrote in a Truth Social post that he would be taking action to prevent corporations from buying single-family American homes — a growing trend that researchers have said has been a drag for first-time homebuyers, neighborhoods, and quality of life.

Trump said Congress ought to codify the ban into law so that a new administration cannot open the door for investors to buy single-family homes in the future.

“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,” Trump wrote in the post, “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.”

He continued:

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. People live in homes, not corporations. I will discuss this topic, including further Housing and Affordability proposals, and more, at my speech in Davos in two weeks. [Emphasis added]

The latest numbers show that investors purchased more than 345,000 U.S. homes in just one quarter of last year, making up about 33 percent of all home purchases that quarter.

Most recently, real estate data showed that in areas hit by wildfires last year in Los Angeles County, California, investors are buying up about 40 percent of properties as homeowners are increasingly unable to afford to rebuild.

Researchers at the University of Colorado Boulder’s Leeds School of Business reviewed real estate data and neighborhood records from Mecklenburg County, North Carolina, where institutional investors bought up almost seven percent of single-family homes sold in the county from 2011 to 2021.

The findings were that in nearly every aspect, investors buying single-family homes has a negative impact on American communities.

“When institutional investors start purchasing at this scale, the effects really start to compound, leading to broader declines in these neighborhoods. As these areas grow and become more concentrated with investor-owned properties, the overall decline becomes even more noticeable,” Stephen Billings, the lead author of the study, said.

“It’s not surprising that the character of the community changes,” Billings said. “When people are constantly moving in and out, it’s hard to expect anyone to truly invest in the long-term well-being of the neighborhood.”

John Binder is a reporter for Breit b art News. Email him at jbinder@breit b art.com. Follow him on Twitter here.

I am not opposed to this. It’s not generally the people on this site but large investors bought up thousands of homes. What I would like to see is the cut off. How many homes before you are considered a large institutional buyer? Even if it is something like 50 it will keep the large investors out.

Buy mine before the new law!

I see hedge fund buyers as an adjustment to the market. I realize they have a competitive advantage with mountains of cash, but any other buyer is also competition.

All apt homes are investor owned.

People these days don't have cash and income to buy homes so they must rent. They might have income and can pass a credit screening, but no cash for downpayments.

They NEED rentals.

We LLs and the big investors provide a service - HOMES with yards and garages for people to live in, instead of just apts.

Yes I know it's frustrating for a homeowner to lose out on a bid but ANYONE could have bought that home at the hedge fund's price.

I finally found a buyer for a very nice home. $10k drop on price from the appraisal, $7k toward their closing costs BECAUSE THEY ARE BROKE! and another $3k toward repairs to seal the deal. Have not closed yet.

The world keeps changing - we must adapt or die.

BRAD

PS I don't thing the govt should be restricting trade - buying and selling, nor be in the real estate business.

I do not like the idea of a company owning all of the properties.

Just the same, I do not like it when an out of state buyer comes in and starts picking up properties at higher prices. This has happened a lot in my area. Most for investments but some for PRs.

One example of investments is a guy that grew up in the area but lives in CA now. He brags about his 300k+ salary. He bought a decent house but paid well above market on it. His plan was to make it a STR. It has sat empty after he spent a lot of money rehabbing it. It's a tax write off for him. One less property for the local consumer. Plus it helped to raise property taxes because of the high purchase price.

Another example is a property I looked at. Old farm house in need of lots of work. Sitting on about five acres. The well worked, septic was iffy. I put a low ball bid in because of all the work needed. Another guy, from out of state, offered over full price.

He bought it, leveled it and put a new house up. Had to get a new septic and I believe possibly he put a new well in too. So basically he bought the land for XX times more than a house was worth. Ironically a small tornado came thru and took part of the completed house down. Ouch. Nobody was hurt tho, so there is that.

Hey NE they can’t mean me because even though I have a few homes it’s not my business. Those properties all came to me one way or another, generally pos properties that were cheap. I’m a multi family investor. I’m listening to talk about this right now and they are specifically saying corporate institutional buyers. So I guess we will see.

The government has rules on all kinds of things but we pick and choose the rules we like.

The C in LLC stands for Corporation... That would be many on this site.

The question that remains is what is "big" if they even try and define it or just stay with corporation as the target. I could see the courts having a field day with any attempt to define what is large, too subjective. More than likely, they will have to go with all or nothing not somewhere in the middle.

I don't like large institutional investors. However, I feel that I can compete against them, especially with service and fair treatment of the tenant.

People make their buying choice based on risk, not price.

Remember the Yugo cars? No young woman out of college bought Yugo's because of their low price. They bought Hondas or Toyotas because the risk of breakdown was low. Or, they didn't want to be at risk of a high priced repair company or shady repair company. They were willing to pay a higher price for a reliable car.

When someone refuses to buy a product at a high price, that's based on risk too. I won't pay an excessive price because too much money is at risk, if I can find a more affordable price elsewhere.

Mostly I don't like the concept that the government will limit my selling market.

How is it fair that I can't sell my property for the highest amount?

Perhaps we should ask ourselves this; do we want to live in a world of renters or in a world of homeowners?

When you bought your own personal house to live in was it in a mostly rental neighborhood?

If it were, would you have bought it to live there?

"Real estate data showed that in areas hit by wildfires last year in Los Angeles County, California, investors are buying up about 40 percent of properties as homeowners are increasingly unable to afford to rebuild."

So if you ban the investors, what happens to the destroyed houses? I don't see that helping increase inventory much.

When I have had renters that didn't fit in with the neighborhood I got rid of them.

That isn't on the renter as much as the owner of the property.

Where I live right now the next house over is a rental. Has been long before I moved here. The owner lives in Ohio.

Next closest house is owner occupied and POS trailer. They lived there for years then moved but refused to sell the place. He died, she is wheelchair bound. His family now mows maybe monthly. Patiently waiting for her to pass so they can take it over.

Couple houses down is another OO that burns his trash, including diapers, plastic and something else that makes it even more horrible. County has been on him for years because of the junk cars. His kids run around like they are feral cats. His wife opted out, in the house.

The hedge funds came into real estate because it made more money than other investments with the added advantage of depreciation tax shelter.

When the pendulum swings back the other investments will look juicy and the hedge funds will dump the props (like Zillow did) and move their money out.

(I'm surprised they are still in housing with all it's headaches and crazy eviction laws!)

Since the beginning of time there has always been competition (remember Cain and Abel?). Always someone willing to pay a little more than the next guy. It's called capitalism.

I bought A LOT of props because I could see the opportunity, (rental demand, rising rents, easy rehab) when other were stuck in the past. People thought I was crazy.

The hedge funds are flush with cash and need to put it somewhere. Houses are quick, easy, and tiny amounts compared to other investments.

Cultures change over time. The housing culture has shifted due to economics. People under 50 are not chasing "the American Dream" of home ownership. That's gone.

I don't see a shortage of housing, I see a shortage of people with enough money and credit to buy, but they have 2 $900 each car payments.

Tax income: In Indiana an investment property pays 2-3 times in taxes compared to owner occupied. That's A LOT of income for the govt.

Hang in there. Adjust to current times.

BRAD

Here is what MonCommie plans to do:

1. Take away all private property rights

2. Kick out homeowners (particularly non POC)

3. Allow NGOs, "non profits," gov't and blackrock types to buy up said property

4. Exempt above entities of the myriads of "tenant protections" ™

I am not following about the higher RE prices.

That only benefits me when I am selling.