US ‘will not become a nation of renters’: Trump

Dive Brief:

• President Donald Trump signed an executive order Tuesday that aims to increase paths to homeownership by barring institutional investors from purchasing single-family homes that could otherwise be bought by families. Trump first announced the move on Jan. 7 in a Truth Social post, surprising some in the industry.
• “America will not become a nation of renters,” the president said in a speech at the World Economic Forum in Davos, Switzerland, on Wednesday. “That’s why I’ve signed an executive order banning large institutional investors from buying single-family homes. It’s just not fair to the public. They’re not able to buy a house.”
• REIT analysts had mixed responses to the executive order, investment bank Mizuho Americas said in a Jan. 20 analyst note. Some it polled said the announcement is a “nothing-burger” and “better than feared,” while others said that “the policy risk overhang continues.”

Dive Insight:

In recent years, Wall Street giants and institutional investment firms have driven up housing prices by purchasing hundreds of thousands of single-family homes, Trump said in his Davos speech, and “it’s been a great investment for them.” In his order, titled “Stopping Wall Street from Competing with Main Street Homebuyers,” he directed the secretary of the Treasury to define “large institutional investor” and “single-family home” within 30 days. 

“I’m calling on Congress to pass that ban into permanent law, and I think they will,” Trump said in his speech. “Homes are built for people, not for corporations.”

As of 2022, mega-landlords owned only about 3% of the SFR housing stock, per a 2024 analysis by the Government Accountability Office. However, these investors are drawn to high-growth and geographically concentrated areas, so percentages vary by region. In Atlanta; Jacksonville, Florida; and Charlotte, North Carolina, for example, institutional investor-owned homes constituted about 25%, 21% and 18% of the single-family rental market, respectively. 

National Multifamily Housing Council President Sharon Wilson Géno and National Apartment Association President and CEO Bob Pinnegar said in a statement shared with Multifamily Dive that rental housing providers are “key partners” in addressing the country’s housing affordability challenges.

“Our nation’s housing crisis – undoubtedly one of the defining issues of our time – cannot be solved without the involvement of every corner of the housing ecosystem, from rental housing to the for-sale market. For millions of Americans across our country, renting provides the flexibility and lifestyle needs that best support them,” Wilson Géno and Pinnegar said in their statement.

A key concern from the housing industry following Trump’s initial announcement was whether institutional investors could still build single-family homes for renting. According to some experts Mizuho Americas polled, the ban on large investors “appears dependent on the interpretation of the phrase ‘homes that could otherwise be purchased by families’” and allows for “properties that are planned, permitted, financed, and constructed as rental communities.” 

“The whole community for build-to-rent has been allowed,” but the president’s policy on mixed-use projects is less clear, said Ivy Zelman, executive vice president of research and securities at New York City-based financial services firm Zelman, in a Wednesday webinar about Trump’s announcement. She pointed out that despite a possible ban, the country’s largest renter of single-family housing, Invitation Homes, acquired SFH build-to-rent firm ResiBuilt for $89 million last week.

At Davos, Trump also touched on other factors impacting homeownership: “The crazy thing is you can’t get depreciation on a house, but when a corporation buys it, they get depreciation,” Trump said. “That’s something we’re going to have to think about too.” Institutional investors can deduct property value loss over time from their taxes to offset rental income.

Trump also named debt as a key roadblock to homeownership, and said he’s urging Congress to pass a one-year cap on credit card interest rates at 10%. “This will help millions of Americans save for a home,” Trump said. “They have no idea they’re paying 28%, they’re a little late on their payment and they end up losing their house. It’s terrible.”

The banking industry has panned the proposal, and it’s unlikely that such a bill would have enough support to become law, according to CNBC. 

In addition, the president is deploying government-controlled mortgage finance firms Fannie Mae and Freddie Mac to move mortgage rates and is moving forward with a new chair of the Federal Reserve to replace Jerome Powell.

“Finally, I have instructed government-backed institutions to purchase up to $200 billion in mortgage bonds to bring down interest rates,” Trump said. “And I’ll be announcing a new Fed chairman in the not-too-distant future,” adding that his pick was “very respected.”

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