How exposed are institutional investors to Trump’s single-family housing ban?

The US housing market has long been a major component of institutional real estate portfolios, primarily in the form of exposure to the multifamily assets. In more recent years, institutional investors have moved into single-family housing. This was understandable given the supply-demand imbalance. Like most developed markets, the US is suffering an affordability crisis that is driving up prices.

This has caught the attention of Donald Trump. Last year, the US administration indicated it might declare a national housing emergency. Then, this week the US president took the market by surprise by announcing that the institutional foray in single-family homes could come to an adrupt end. On his Truth Social media platform, he said: “I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it. People live in homes, not corporations.”

No executive order has been issued yet, but judging by the political reaction on both sides it seems likely that the proposal will pass. Republican senator Bernie Moreno of Ohio announced he would introduce legislation to codify the ban into law, while Republican representative Riley Moore praised it as vital to the American dream. Democrats were likewise supportive from possible presidential candidate and California governor Gavin Newson to veteran Senator Elizabeth Warren, who noted she had been advocating similar measures against Wall Street homebuying for years. She pushed Trump to back a bipartisan bill passed unanimously in the Senate.

The proposal aligns with long-standing calls from housing advocates concerned by how institutional investors, including private equity firms and real estate investment trusts (REITs), have acquired significant single-family rental portfolios over the past decade. On Wednesday, Jesse Van Tol, president and CEO of the National Community Reinvestment Coalition, said: “Families should be able to compete fairly for a home in the communities where they work and raise their kids—not be outbid by Wall Street firms that treat starter homes like financial instruments.”

But there was also wider industry support. The National Rental Home Council, the trade association for the single-family rental (SFR) home industry, said: “Housing affordability is a critical issue, and we appreciate the administration’s focus on ensuring Americans have access to a diverse mix of housing options.” Similarly, the chairman on the National Association of Housebuilders (NAHB), Buddy Hughes, stated: “We appreciate President Trump’s efforts to create more opportunities for home ownership and look forward to working with the administration on a broad range of policy ideas to do so.” However, he said it was any new policies must not “cut off capital for new construction, including homes built for rent, which provide a critical source of new housing supply”. He said: “America needs a multipronged approach that addresses regulatory and financial burdens to improve housing supply and affordability.”

The big question is what would happen to companies that have already made significant inroads into single-family housing if this ban is actually put into action. Progress Residential, owned by Pretium Partners, Invitation Homes, a REIT spun off from Blackstone, and American Homes 4 Rent, another REIT, rank as the largest US institutional owners of single-family homes, holding portfolios of 90,000-100,000 units each as of late 2025.

Shares in both American Homes 4 Rent and Blackstone dropped on Wednesday, at the worst point by 7% and 9%, respectively. Since selling Invitation Homes, Blackstone maintains smaller direct single-family holdings, and in 2024 it acquired Tricon Residential, which has a single-family development platform. These large owners will have to wait to here more details from Trump’s pending appearance in Davos.

A Blackstone spokesperson pointed out that the real estate investment manager has a relaively low exposure to single-family housing today, telling IPE Real Assets: “Our ownership of US single-family homes represents about 2% of our real estate AUM and 0.5% of the overall firm. We have also been a net seller of homes over the last decade – with our holdings down more than one-fifth.”

How exposed are institutional investors? Analysis in 2024 by Scott Dunphy and Michael Steinberg of MetLife Investment Management, published by the Pension Real Estate Association (PREA), found that the market share of single-family housing in NAREIT’s public real estate index and PREA’s ODCE index, which tracks core open-ended funds, had increased from 0% to 2.8% and 0.9%, respectively.

MetLife, which itself had raised a single-family housing fund in 2023, forecast these shares to reach 5% by 2034. That might now need to be revised, depending on what happens next.

Would a ban actually help with affordability?

Another question is whether a ban would actually help address housing affordability. According to real estate data platform BatchData, real estate investors accounted for a third of all single-family home transactions in the second quarter of 2025, up from 27% in Q1, marking a five-year high. But these figures could be misleading.

When the report came out, BatchData co-founder and president Ivo Draginov, said: “The headline number is striking, but the real story is why investor shares hit record levels. This isn’t about investors outcompeting families, it’s about investors becoming the only buyers left standing when mortgage rates effectively doubled monthly payments and priced out more than half of middle-income households.”

Moreover, while the report highlights that investors own about a fifth of the roughly 86 million single-family homes in the country, the vast majority of those are small ‘mom-and-pop’ investors. The majority (87%) of investors own one to five properties, while another 4% own six to 10. Large investors – meaning those with 1,000 or more homes – represent only 2%, countering perceptions of institutional dominance.

So any ban on large institutional investment is unlikely to have an effect. The ban would have more of an impact if was extended to ‘mom and pop’ owners – in the same way the UK government has squeezed ‘buy-to-let landlords’ via tax increases. This would seem unlikely, but Trump’s policies have become predictably unpredictable.