• Trump proposes banning institutional investors from purchasing single-family homes.
• The move aims to improve housing affordability for Americans.
• Shares of major real estate companies fell sharply following the announcement.

On Wednesday, President Donald Trump announced his intention to "immediately ban large institutional investors from buying more single-family homes," suggesting that this move would help make home ownership more accessible to Americans. He affirmed the longstanding American Dream of home ownership is becoming increasingly unattainable for many, particularly young individuals struggling to enter the housing market. Trump's statement conveyed that “people live in homes, not corporations,” underscoring his motivation for the policy change. He plans to seek congressional support to codify this ban, providing further details at the upcoming World Economic Forum in Davos, Switzerland, according to CBS News and India Times.

The announcement has already impacted the stock market, with shares of firms involved in single-family rentals, including Invitation Homes and Blackstone, experiencing significant declines. Trump's statement reflects a broader concern that institutional investment in housing has contributed to rising rents and property prices, which disproportionately affects first-time homebuyers. According to reports, the Government Accountability Office found that such investment practices can escalate housing costs, especially in high-demand areas. In this context, companies like American Homes 4 Rent also saw their stock prices decline after Trump's announcement, as indicated by BBC and India Times.

Despite the push for a ban, some analysts have questioned the effectiveness of such a policy, citing that institutional investors control a rather small segment of the housing market. Reports indicate that Blackstone and similar investors currently own approximately 0.5% of all single-family homes in the U.S. Furthermore, research indicates that investors with ownership of significantly more properties tend to have a limited overall market share. This raises doubts about the potential impact of a sweeping institutional purchase ban on home prices, as highlighted by housing experts and CBS News, India Times, and BBC.