You walk into an open house on a sunny Saturday morning, pre-approval letter in hand, ready to make an offer on your first home. But you're not just competing with other families anymore. You might be up against a company that owns 10,000 houses and can pay cash. Should you be worried? Should the government step in? These questions just became a lot more urgent.

Trump Takes Aim at Wall Street Landlords

On January 20, 2026, President Trump signed an executive order targeting what he calls a fundamental threat to the American Dream: big companies buying up single-family homes. Speaking to CNBC from Davos the next day, he put it bluntly: "You have these big companies, these big corporations, buying up thousands of homes and renting them or doing whatever they do with them... We want people to be able to buy a home."

The order gives the Treasury Department 30 days to define what counts as a "large institutional investor" and what exactly qualifies as a "single-family home." Within 60 days, federal agencies must issue guidance limiting how many homes these investors can buy. The order also blocks the sale of federally owned properties to institutional investors entirely.

It sounds decisive. But does it address the real problem?

The Numbers Tell a Complicated Story

Here's the thing: institutional investors aren't nearly as dominant as you might think. Firms owning 100 or more single-family homes control roughly 2% of the nation's housing stock, according to John Burns Research and Consulting. Their share of purchases has actually been falling—from about 3% in early 2023 to closer to 1% a year later as higher interest rates made their business model less profitable.

But zoom out slightly and the picture changes. Investors of all sizes—including "mom and pop" landlords with just a few properties—accounted for a record 30% of single-family home purchases in the first half of 2025. Small-scale investors actually account for most of the investor-owned rental growth. The big institutional players represent only about one-fifth of investor purchases.

These large investors also concentrate their activity geographically. They primarily operate in the 20 largest U.S. metropolitan areas, leaving most of the country untouched by their influence.

The Affordability Crisis Is Very Real

Whatever role investors play, housing affordability has reached crisis levels. U.S. home prices hit all-time highs in April 2025, even as mortgage rates remained at their highest levels in over 15 years. That combination is brutal.

The income needed to buy a single-family home has doubled since 2019. Read that again: doubled in six years. The ratio of home prices to median household income has risen five-fold since 1984. Annual existing home sales fell 19% in 2023, approaching a 30-year low. People aren't just complaining about affordability—they're actually unable to buy.

Interestingly, renters have fared somewhat better. Average apartment rents and median wages both increased by 32% from mid-2019 to mid-2025. Renting has maintained its relative affordability even as homeownership has slipped further out of reach.

Supply Is the Villain in This Story

Most housing economists point to a single culprit: we're not building enough homes. Goldman Sachs Research estimates the U.S. needs millions of additional homes beyond current construction levels to meaningfully ease price pressures.

Had household formation trends from 2012-2020 continued, we'd have 2 million more households today. That's 2 million households worth of pent-up demand—people living with parents, delaying marriage, cramming into shared apartments. They want homes. Those homes don't exist.

Construction has actually been falling when we need it most. Total residential permitting dropped more than 20% from December 2021 to December 2022, and there was no recession to explain it. What happened? The Federal Reserve raised interest rates from near zero in early 2022 to 5.25%-5.50% by late 2023. Higher borrowing costs slammed the brakes on development.

We're also building the wrong type of housing. The shortage of smaller homes is particularly acute, even as demand from new, smaller, and older households increases. Young buyers and retirees downsizing both need smaller, more affordable options. We're not building them.

Local zoning regulations and permitting gridlock remain the biggest obstacles to supply. Though momentum may be building for reforms toward increased densification, change happens slowly in American local government.

What Institutional Investors Actually Do

Research on institutional investors reveals a nuanced picture. They tend to buy dilapidated properties and renovate them, which can improve neighborhoods. According to St. Louis Fed research, institutional investor-owned properties tend to increase prices of nearby homes. Small-scale investor ownership, interestingly, appears to have the opposite effect.

But there's a darker side. Research from the Federal Reserve Bank of Atlanta in 2016 found that corporate landlords may file for eviction more frequently than individual landlords. A 2023 study in the Review of Financial Studies showed that Wall Street landlords may push rents higher, undermining renter welfare.

Yet markets with the highest institutional investor concentration posted rent growth below the U.S. average in 2024, according to housing analyst Jay Parsons. Why? Those markets also had higher construction levels. Again, it comes back to supply.

The Policy Might Miss the Target

Scott Lincicome from the Cato Institute puts it plainly: "Institutional investors are just not the main market movers. It's mainly a supply issue." Jay Parsons agrees: "The real problem is that we've added far more households than we've built single-family homes. It's all about supply and demand."

Here's the fundamental problem with restricting institutional investors: it doesn't add a single new home to the market. It might reduce competition for existing homes, which could help some individual buyers. But it does nothing to address the shortage that's driving prices up in the first place.

Housing economists say affordability will not improve without a significant increase in supply. You can't regulate your way out of a shortage.

The Historical Pattern

Institutional investors surged into single-family rentals after the 2010 housing market collapse, buying up foreclosed homes at low prices. That made sense—there was distressed inventory that needed buyers. Investor-owned single-family rentals as a share of total properties increased throughout that period.

We're seeing a resurgence now, but for different reasons. Higher home prices, higher mortgage rates, and fewer homes for sale have created conditions where more people need to rent. Investors are responding to that demand.

The question isn't whether investors should exist in this market. They've always existed. The question is whether their current scale and structure harms prospective homebuyers and renters enough to justify government intervention.

What Happens Next

The Treasury Department now has 30 days to define terms that will shape this entire policy. What counts as "large"? Is it 100 properties? 500? 10,000? Will the definition capture only the biggest players like Invitation Homes and American Homes 4 Rent, or will it sweep up smaller regional operators?

How they define "single-family home" matters too. Does it include duplexes? Townhouses? Condos? These technical details will determine whether the policy is a targeted strike or a blunt instrument.

Federal agencies then have another 30 days to issue implementation guidance. The real test comes when they try to limit acquisitions. Will there be geographic quotas? Hard caps? Purchase approval processes?

The Bigger Picture

Trump's executive order is politically popular. Many Americans believe big companies are pricing them out of homeownership, and they want action. The order gives them action.

But it may be action directed at the wrong problem. If institutional investors control 2% of housing stock, restricting them addresses 2% of the issue. The other 98% remains untouched.

The uncomfortable truth is that solving housing affordability requires boring, difficult work: zoning reform, streamlined permitting, infrastructure investment to support new development, and letting builders build. These solutions take years and face fierce local opposition.

Restricting institutional investors is faster and more dramatic. It creates clear villains and clear heroes. It just might not work.

The executive order may help some individual buyers compete more effectively for existing homes. That's not nothing. But unless it's paired with serious efforts to increase supply, it's rearranging deck chairs while the ship takes on water.

Housing affordability is a crisis. We need solutions equal to the scale of the problem. That means millions of new homes, not restrictions on a small slice of current buyers. Whether Trump's order evolves into comprehensive housing policy or remains a symbolic gesture will determine whether it's remembered as a turning point or a missed opportunity.