LIVE MARKETS-Limits on US institutional home buying could have little impact

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LIMITS ON US INSTITUTIONAL HOME BUYING COULD HAVE LITTLE IMPACT

A proposal by U.S. President Donald Trump to restrict large buyers from acquiring single-family homes could have limited impact even in the event it becomes law, according to Jina Yoon, chief alternative investment strategist at LPL Financial.

Trump earlier this month said his administration is moving to ban Wall Street firms from buying up single-family homes in a bid to reduce home prices, a potential blow for private-equity landlords.

The proposal faces a lengthy path before becoming law. And even if enacted, the policy's impact on housing affordability may be limited, said Yoon.

Investor purchases of single-family homes reached a record 30% in the first half of 2025 according to the St. Louis Federal Reserve, but nearly 80% of those transactions involved small mom-and-pop investors rather than large institutions.

Major institutional investors own only 2-3% of single-family homes nationwide, with concentrated holdings primarily in cities like Atlanta, Phoenix, and Charlotte, suggesting the nationwide effect would be modest, Yoon said.

The proposal's scope also presents potential loopholes, as it covers only existing homes and not new construction, potentially redirecting institutional capital toward build-to-rent projects.

Meanwhile, Yoon notes that housing affordability is driven by multiple structural factors beyond institutional ownership, including supply shortages, zoning restrictions, income levels, and mortgage costs.

(Karen Brettell)

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