Trump bans Wall Street from nabbing family homes… but there's a side effect that should worry every homeowner
President Donald Trump is taking aim at Wall Street's role in the housing market as Americans grapple with rising prices and tight supply — a move that could hurt current homeowners.
Trump says he's moving to shut Wall Street out of the single-family home market, aiming to cool soaring home prices.
The policy could hurt big investment firms that own rental homes and cause the stock prices of homebuilding companies to fall.
In a Truth Social post Wednesday, Trump said action would be swift and that he plans to push Congress to lock the ban into law.
'For a very long time, buying and owning a home was considered the pinnacle of the American Dream,' Trump wrote, going on to add that inflation had put that dream out of reach for many Americans.
'People live in homes, not corporations,' Trump said.
He also teased more housing affordability plans to be unveiled in an upcoming speech at the Davos World Economic Forum.
While the move may sound like good news for Americans struggling to afford homes, it could come with a downside for current homeowners.
President Donald Trump is taking aim at Wall Street's role in the housing market
Trump says he's moving to shut Wall Street out of the single-family home market, aiming to cool soaring home prices (pictured: a row houses in Washington DC)
Large-scale investment in housing — including single-family homes — helps drive up property values. Without competition from institutional investors, price growth could stall, and home values may even decline.
Put simply, without demand from big investors in the market, supply could flood in and home prices could tumble.
'Research has consistently shown that large institutional investors play a relatively small role in the market for owning single-family homes,' said Norbert Michel, Cato Institute vice president and director of the Center for Monetary and Financial Alternatives.
He continued: 'Regardless of how small that share might be, nationally or in specific local markets, the federal government should not be in the business of banning certain people or firms from buying homes or anything else.
'Infusing private capital into housing markets, as with other segments of the economy, should be welcomed because it has positive long-term effects.'
Wall Street firms like Blackstone have snapped up thousands of single-family homes since the 2008 financial crisis triggered a surge in foreclosures.
In recent years, they've poured even more cash into rental housing, which has outperformed struggling commercial sectors such as offices and retail amid rising borrowing costs and shifting work habits.
Wall Street's growing footprint in home ownership has drawn backlash from housing advocates and lawmakers, including Democrats, who argue that big institutional landlords have tightened housing supply and pushed rents higher.
Large-scale investment in housing — including single-family homes — helps drive up property values
Markets reacted quickly to Trump's remarks, sending housing-related stocks sharply lower.
Many people agree with Trump’s view that private firms hold too much power in the housing market.
'President Trump’s proposal to ban large institutional investors from buying single-family homes is a crucial step toward reclaiming the American dream of homeownership,' venture capitalist Ibrahim AlHusseini told the Daily Mail.
'For too long, hedge funds and private equity firms have turned housing into a profit-maximizing machine, using algorithms to inflate rents, pricing families out, and locking generations into a cycle of permanent renting,' he added.
