Trump’s pledge to upend Wall Street’s 15-year push into the market for single-family American homes raised alarms across the real estate investment industry — and skepticism.
“I’m not concerned about it,” said Todd Henderson, the head of real estate for the Americas at DWS, an investment firm that has purchased single-family rental homes.
While details of Trump’s proposal are unknown, Henderson expects that it will eventually exclude institutional buyers who have purchased newly built homes, which have become the focus of much of the single-family rental (SFR) industry.
“The fear is that large investors are buying single-family homes and that it’s taking out of the sales pool and driving up the cost of housing — that’s what is driving this discussion,” Henderson said. “We’re building this stuff and adding it to supply.”
In a message on his social media platform Truth Social on Wednesday, Trump said that he was “immediately taking steps to ban large institutional investors from buying more single-family homes.”
“People live in homes, not corporations,” Trump wrote.
Some analysts, however, suggested that that view was out of step with the institutional SFR industry’s contemporary business model, which has shifted away from the inefficient — and politically sensitive practice — of competing against everyday homebuyers to scoop up properties one by one.
Invitation Homes, a public company that is one of the largest owners of SFR homes, “has almost exclusively moved to acquiring homes from homebuilders rather than on the MLS,” according to a research note from RBC.
“AMH’s external growth comes from development rather than acquisitions,” Barclays wrote in a report, referring to American Homes 4 Rent, another large SFR owner.
Trump’s announcement caused shares of Invitation Homes and American Homes 4 Rent to fall by about 7% and 9% respectively, according to KBW.
Other major investors, including Blackstone, also saw an impact on share prices. Blackstone Real Estate Income Trust, a non-trade REIT managed by the firm, holds about $11 billion worth of SFR investments totaling about 9% of its portfolio.
Jade Rahmani, an analyst at KBW, wrote that the market reaction “seems excessive and could present a buying opportunity” in a Wednesday report on the potential ban.
The market is waiting for clarity, but not sweating it
Details were scant about how Trump’s prohibition on Wall Street homebuying would work.
Trump said that he would be “calling on Congress to codify it” and that he would “discuss this topic” during “my speech in Davos in two weeks.”
Trump has walked back policies, such as his tariffs, due to disruptions to the economy and investor concerns.
The likely need for congressional approval could insert more complexity — and uncertainty — over the process of formalizing an SFR ban.
A Mizuho report said that Republican Sen. Bernie Moreno had proposed a bill to codify Trump’s SFR ban, but that it “doesn’t believe” it will progress “anytime soon.”
Henderson said he believes that any rules imposed on the SFR industry would exempt both builders and buyers of new SFR homes and would allow major investors to sell existing portfolios freely. Such caveats would leave the SFR industry basically unchanged.
“I think it will increase the value of the purpose-built SFR homes and make that strategy even more valuable,” Henderson said.
The SFR industry has pointed out that its investors own a comparatively small share of the roughly 80 million single-family homes in the country.
In October 2023, Parcl Labs found that investors who own 10 residential units or more held about 3.4% of all single-family homes, and that larger investors with at least 1,000 units controlled just 0.73% of the inventory.
“Professional single-family housing providers represent a small segment of the overall housing market, and the single-family rental industry remains focused on supporting renters while also supporting pathways to homeownership,” said a spokeswoman for National Rental Home Council, an industry group that represents SFR owners.
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