Hundreds of firms are poised to be blocked from buying homes en masse, under a White House plan aimed at preserving the American dream of homeownership, according to new details.
Since President Trump announced last month he would block institutional investors from scooping up homes — a practice that critics fault for pricing out regular homebuyers — firms have been anxiously awaiting the details.
The White House now says it wants to ban all institutional investors with more than 100 homes from buying more single-family properties, the Wall Street Journal reported, citing a memo the White House sent to congressional leaders on Thursday.
The plan is more sweeping than many had expected — some investors anticipated the ban would apply only to firms with more than 1,000 homes in their portfolios, according to the outlet.
Mid-size investors will likely be outraged by the wider scope of the ban, which could cut off hundreds of investment firms from purchasing US single-family homes.
There are several major exemptions, though, including for investors who build or renovate homes for the sole purpose of renting them out, according to the Journal.
“The President has made it clear that he is committed to signing legislation that truly makes purchasing a home affordable again, and a key ingredient is his popular proposal to ban large institutional investors from purchasing single-family homes,” White House spokesman Davis Ingle told The Post in a statement.
“The White House is pleased with the collaboration coming from both chambers and both sides of the aisle as Congress works toward enactment of a housing package.”
For weeks, the Trump administration has been pressuring policymakers to add the home-buying ban to either of the housing packages working their way through the Senate and House.
Democrats have started pushing back on the proposal, arguing it has too many exemptions to be effective and should require some investors to sell off existing properties, the Journal reported.
The president’s proposal also gives Treasury Secretary Scott Bessent control over how to define a “large institutional investor” and the ability to “modify, add to, or subtract” any of the criteria, according to the article.
The White House has sent the proposal to the Senate Banking Committee and House Financial Services Committee, asking for feedback, the report said.
Housing advocates have argued that widespread corporate ownership can restrict supply and inflate prices, pushing homeownership even further out of reach for struggling families.
The impact would be greater in certain cities where investment firms hold much larger chunks of what historically would be starter homes – accounting for more than 20% of all home sales in Houston, Miami, Phoenix and Las Vegas during the pandemic, for example.
Critics have argued the ban won’t have much of an impact on the majority of American homebuyers, though, since firms that own 100 or more single-family homes control just 2% of the nation’s housing supply, according to John Burns Research and Consulting.
Large investors and private-equity firms have bought up hundreds of thousands of single-family homes over the past decade.
After the 2008 financial crisis sent home prices nosediving, investment firms swooped in to buy up the leftover inventory in bulk at foreclosure auctions.
Wall Street bigwigs often showed up armed with huge all-cash offers, making it near impossible for first-time buyers to compete.
In another attempt to address the housing affordability crisis, Trump has ordered a $200 billion mortgage bond-buying spree. It would give lenders more money to loan to homebuyers, creating a higher supply of cash that potentially allows interest rates to fall.
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