Donald Trump wants to ban institutional investors from buying single-family homes

Trump is going to war again, this time with real estate investors, and this is a warning to Airbnb/Vrbo operators and all real estate investors alike: policy changes can easily destroy cash flow profits.

Just as we have seen some markets ban short-term rentals, banning institutional investors is not entirely impossible.

Trump announced a crackdown on the buying practices of large institutional investors, declaring his administration is moving to ban them from the single-family home market entirely.

For years, people have had to compete with institutional investors who can pay cash to buy property, making it harder for the everyday American to buy a house.

As uncertainty continues, I predict that there will be plenty of real estate operators who just sell and don’t wait for real estate prices to crash. Mixing this news with the fact that many people holding 3% mortgages are starting to walk away from homes, this could very well be the year that people can buy a home for a solid discount.

The best thing to do is to be overprepared.

After Trump’s 2024 victory, there haven’t really been any real policy shifts in real estate. The housing crisis has made it so that in California, for $1,000,000, people are still struggling to buy a decent home.

The reality is it’s not just institutional investors like BlackRock and other investors alike, though. There are also plenty of speculators turning residential neighborhoods into unlicensed hotels or short-term rentals, along with those who profit from having multiple properties as rentals, which fuels the home shortage. The hard part is policing people who purchase fraudulently or differently than their designated purposes, such as those committing mortgage fraud. So it will be interesting to see if Trump can actually create a plan to solve that issue.

“For a very long time, buying and owning a home was considered the pinnacle of the American Dream,” Trump wrote on Wednesday, framing homeownership as “the reward for working hard and doing the right thing.”

He didn’t mince words about the cause, blasting the current reality where that dream is “increasingly out of reach” and laying the blame squarely on “record high inflation” from the Biden era.

Trump declared: “It is for that reason... that I am immediately taking steps to ban large institutional investors from buying more single-family homes... People live in homes, not corporations.”

The president will likely attend the World Economic Forum, and hopefully, more context is provided about what this policy might actually look like.

I built my real estate brokerage with the idea of helping solve housing prices and helping bring the prices of homes down for all consumers. If you’d like to learn more, subscribe for market insights.

Rene Perez Jr., Broker

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