President Trump thinks he knows best what housing choices you and others should make and he’s not afraid to use the power of the federal government to impose them.
In a social media post on January 7, President Trump stated he wants to “ban large institutional investors from buying more homes.”
In Davos this week, Treasury Secretary Bessent re-stated the goal but provided a bit more nuance. He noted that the policy goal would be to “push out” the “big” institutional investors, not the mom-and-pop operators that make up most of that market. (The president is expected to talk more about this as the World Economic Forum proceeds throughout this week.)
For a variety of reasons, these justifications lack empirical support. For an excellent debunking of these rationales, see this blogpost by housing expert Jay Parsons.
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In my conversations with people, I was surprised by how many people were supportive of this ban. But maybe I shouldn't be
Home real estate markets should be driven by open supply and demand pricing and buying. However, when you have an institutional player buying units as a investments at a large number, easily out-positioning any individual buyer and groups of them in regional markets, then you have an artificial inflation of demand and reduction of supply. That jacks over the consumer buyer who is then victim to the same institutional player re-selling at higher demand levels, trickling out supply they have a partial monopoly over. Institutional buyers should only be allowed in the context of foreclosers and limited to selling at cost to recover their debt loss. Otherwise, it's like watching a soccer game where one team has the run of the field and the other has both legs tied to a cement block so they can't move more than a few feet at a time.
You are suggesting that the institutional buyers are able to achieve local monopolies in housing supply simply by buying up all the houses, but I don't think there's much evidence that that they've reached that level of market capture. If your concern is monopoly power I bet there are bigger fish to fry than institutional housing investors.
How can you convince me that there is something worse about this than a rich person outbidding you for a home that they intend to rent out, but which you intended to live in?
First off, it's not a rich person, it's a rich corporation or LLC landlord operation versus an average homebuyer consumer. Second, markets are driven by who is doing the buying, not the looking. Investor buying is eating up 10-25% of regional markets, and that's going to have an impact on pricing for the same region's private buyers. I don't care to convince you true or not, that's your choice to determine how to read the market.
https://nevadacurrent.com/2026/01/19/investors-own-a-quarter-of-nevadas-houses-but-are-misunderstood-says-report/
https://www.azfamily.com/2026/01/20/are-families-being-pushed-out-phoenix-area-neighborhoods/
https://www.nar.realtor/magazine/real-estate-news/nar-calls-for-federal-incentives-to-spur-investor-sales
https://www.marketwatch.com/story/more-bad-news-for-home-buyers-real-estate-investors-are-seizing-an-opening-and-ramping-up-purchases-707982cf?gaa_at=eafs&gaa_n=AWEtsqc9qfFhBi9h-qOyeRAKFjd9ZKHpD5M9SKMt75CNPDr_DQiGR5qH5leQ&gaa_ts=69714eb9&gaa_sig=W_Zr-DGu6I9Uik7TeykQN-am4D3fVCIcZ-RO7mk3Tu0FEj-Le4jMtYRj2IBX_kw6x2ZBoWUOG4qGmtGdME_qtw%3D%3D
Anyone buying anything is going to push up prices for someone else. Consumers are all in competition each other to buy scarce resources, just like sellers are also in competition with each other.
Why should the identity of who you're competing with matter? Why should a seller be prevented from entering into a voluntary contract with an institutional investor?
See also this for a response to some of the claims: https://jayparsons.beehiiv.com/p/top-11-myths-on-institutional-investors-of-single-family-homes
That perspective is ignoring the impact of quantity buying to a regional market. If I buy 10 or 20 of something rare, it has a far greater market impact than you buying 1 unit in the same market. Again, basic supply and demand economics here.
It's not ignoring the impact, it's just asking why we should ban legitimate economic activity based on the impact that it has (which is actually temporary, because if it was just a one-time surge in demand without persistent demand, eventually it'll be a money losing endeavor for those institutional investors)
And it's not temporary, however. Bank of America and Wells Fargo are both sitting on $20 billion each in foreclosures and delinquency units. That doesn't happen momentarily; it happens over time. However, the banks have been under an industry moratorium to process foreclosures quickly. That's changing because their liability figures on the books are so big. Now, just imagine what happens to housing pricing when those foreclosures are unloaded competitively versus trickled out. And those two banks are not the only ones. They're just the biggest.
I don’t really have enough knowledge to draw any conclusions, I just know that government restrictions are usually not a good thing. The blogpost linked here looks pretty good, though I’ll admit I only read the main headlines.
Institutional buyers are a symptom of problems in the real estate sector, like artificial scarcity.
This is a classic government breaking your legs and selling you (broken) crutches situation.
Artificial scarcity seems like it would affect institutional buyers and mom & pop buyers the same way. Perhaps it's more accurate to say that institutional buyers are a symptom of the Cantillon effect.
I’m thinking it’s a combination of both but that artificial scarcity is why real estate carries a large premium over its use value.
Cantillonaires need safe places to park lots of capital.
https://twiiit.com/scottlincicome/status/2008962413446438978