On Jan. 7, President Donald Trump announced in a social media post that he would be “immediately taking steps to ban large institutional investors from buying more single-family homes.” The president promised further details would be forthcoming during his speech at the World Economic Forum in Davos later this month.
While many applaud the president for tackling housing affordability, not everyone is sure that banning institutional investors will make a meaningful difference in the market.
“Making homeownership more accessible has long been a bipartisan priority,” according to Jake Krimmel, senior economist for Realtor.com. However, he thinks this proposal probably won’t do much to address the underlying inventory shortage that has been pushing home prices higher.
On the other hand, some observers say limiting institutional buyers can’t hurt.
“Anything that helps limit what they … purchase will make housing more affordable,” says Andrew Postell, vice president of mortgage lending for Rate.
Still, there are questions about how the president’s proposal could be implemented, and until those are answered, it is difficult to gauge its potential impact.
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Questions Remain About Trump’s Proposal
Trump’s social media post on the topic didn’t include any specifics, which was one of the first things many real estate experts noticed.
“We’ve all noted that the details are a bit fuzzy,” Krimmel says. “It’s not immediately clear who that would apply (to).”
Certainly, large companies such as Invitation Homes — which owns 80,000 houses across 16 markets — would qualify as an institutional investor. But it’s not clear at what point a smaller company would cross into the large investor category.
There is also the question of what will happen to the existing properties owned by these companies.
“I know he’s proposed a ban from buying. He did not mention selling,” says Thom Malone, principal economist with Cotality, an information services provider that analyzes, among other things, mortgage and housing data.
If large companies are allowed to keep their current inventory, that won’t do much to address the issue of limited housing supply. Malone also wonders if there may be any exceptions to a ban, such as allowing institutional investors to buy new homes but not existing properties.
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What Is a Large Institutional Investor?
The central question that needs to be answered, though, is what qualifies as a large institutional investor.
There is no standard definition, but Malone says Cotality uses the following to categorize different levels of housing investors:
— Small: three to nine units
— Medium: 10 to 99 units
— Large: 100 to 999 units
— Mega: 1,000 or more units
Meanwhile, a report from the American Enterprise Institute’s Housing Center defines a large institutional investor as one that owns at least 100 properties.
“I’d almost like to see it be a dollar figure rather than a number of homes,” suggests Postell, noting that an investor who owns 100 mobile homes isn’t necessarily the same as someone who owns 100 traditional homes.
Another consideration in defining institutional investors is what a company does with a property after it makes a purchase, Malone says. Some people might make a distinction between companies that purchase homes to rent them out and those who resell — or flip — homes after renovations are completed.
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Impact of Institutional Buyers in the Housing Market
Regardless of how specifically they are defined, everyone seems to agree that institutional investors represent only a small percentage of home sales and ownership in the United States.
“There are a lot more mom-and-pop-type investors,” according to Nicole Brown, global real estate advisor at Corcoran Icon Properties. She points to data from real estate analytics firm BatchData as showing that nearly 90% of landlords of single-family homes own between one and five properties.
Depending on who is making the estimate, it is believed that anywhere from 1%-3% of homes are purchased by large investors. BatchData estimates 1.1% of landlords owned 101 to 1,000 properties in September 2025 and 1.6% had more than 1,000 properties.
“It’s really not a large slice of the pie,” according to Krimmel.
“But that’s hundreds of thousands of houses,” Postell says.
About 500,000-600,000 nationwide, by Malone’s data. That number has also been dropping since 2022.
Blackstone, one of the largest investors of real estate in the country, pegs institutional ownership of U.S. homes at only 0.5%. It also says home purchases by large investors in 2024 were down 90% from 2022.
Krimmel says that with institutional investors already pulling back from the market, banning them may not make much difference in terms of housing accessibility and affordability.
For comparison, investors of all sizes were responsible for one-third of all single-family home purchases in the second quarter of 2025, according to Cotality.
Some Skeptical of Proposal’s Effect on Affordability
“There are two ways to make housing more affordable,” according to Malone. “The first is to reduce demand. The other is to increase supply.”
Banning institutional investors from buying new homes will help reduce demand. However, unless they are required to sell off their inventory, it isn’t likely to increase supply.
Trump “would need to specify if they need to offload current inventory,” Brown says.
Even then, the impact on housing affordability may be felt only in certain regions, such as Sunbelt cities like Atlanta, where a sizable share of homes are owned by institutional investors. Requiring the sale of these houses and restricting future purchases could have unintended consequences, though.
“The construction sector could respond by pulling back,” Malone says. He notes that institutional investors often purchase new homes and without these large buyers available, builders may slow their activity. That could further restrict the supply of housing available.
In 2024, the housing supply gap reached 4 million homes, according to Realtor.com data. Since then, inventory has continued to grow monthly, but housing needs and availability vary greatly by region and city.
That’s something Brown sees in her real estate work, which covers both San Francisco and Northwest Florida. While California’s Bay Area has a large deficit of housing, parts of Florida have flooded rental markets and falling home prices.
To address supply issues, real estate experts believe local municipalities should make it easier to develop the mix of properties needed by local communities. That may mean streamlining the permitting process and allowing greater density and smaller homes. Many current regulations have “made it very hard for people to build properties,” Brown says.
Despite broad support for taking on housing, skeptics question whether a ban on institutional investors will deliver meaningful relief. “It’s a bit of a red herring when it comes to the affordability and supply issues we’re facing,” Krimmel says.
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Could Trump’s Proposed Ban on Large Investors Make Homebuying More Affordable? originally appeared on usnews.com
