headline: Politicians push to ban investor homebuying; economists say it won’t solve the housing crunch publish_date: ‘2026-03-06’ le…

  • Housing economists said the measures carry political appeal but would not substantially reduce home prices. Large institutional investors…
  • President Donald Trump called on Congress at his State of the Union address to permanently bar large institutional investors from purchas…
  • Housing economists said the measures carry political appeal but would not substantially reduce home prices. Large institutional investors…
  • The debate pits a politically resonant target against what housing economists describe as a harder but more effective remedy: building si…

President Donald Trump called on Congress at his State of the Union address to permanently bar large institutional investors from purchasing single-family homes, and the U.S. Senate this week advanced a housing bill with a provision that would cap such ownership at 350 homes per firm. Trump signed an executive order in January aimed at discouraging federal agencies from facilitating sales of homes to large institutional investors, and lawmakers from both parties — including Sens. Bernie Sanders and Elizabeth Warren — have separately pushed similar limits.

Housing economists said the measures carry political appeal but would not substantially reduce home prices. Large institutional investors own an estimated 1% to 3% of the nation’s single-family housing stock, and the country’s affordability problem stems primarily from a shortage of millions of housing units — a gap that restricting purchases would not close, experts said.

The debate pits a politically resonant target against what housing economists describe as a harder but more effective remedy: building significantly more homes in the places where demand is highest.

The story Trump told at the State of the Union

Raysall Wiggins, a Houston health care worker, spent years trying to buy a home in Acres Home, the neighborhood where she grew up. More often than not, her offers lost out to investors and corporations, her real estate agent said.

“It’s devastating to continuously go through the same thing, for a person to constantly be told, ‘no’ or ‘we didn’t get it,’” Wiggins said. “It’s a complete letdown.”

Trump highlighted Wiggins’ story at his State of the Union address, saying investors were “stealing away her American Dream,” and called on Congress to make the ban permanent.

Wiggins eventually purchased a home in 2023 through the Harris County Community Land Trust, a program in which the trust owns the land while the buyer owns the house, lowering the overall purchase cost. She said she has mixed feelings about the arrangement but that it allows her to build equity and pass the property to her children.

“It was another way of still obtaining the dream,” Wiggins said.

A cross-party push, including in Texas

Republicans and Democrats alike have sought to limit investor homebuying. In addition to Trump’s executive order and State of the Union call, senators were expected to vote this month on the bill containing the 350-home ownership cap. The bill also includes a provision requiring companies to sell homes in build-to-rent developments within seven years, according to Bloomberg News — language that builders and a coalition of housing advocates have called on lawmakers to remove.

Texas Gov. Greg Abbott and state Rep. Gina Hinojosa, an Austin Democrat challenging Abbott in this year’s gubernatorial race, have each expressed support for restrictions on investor homebuying.

Abbott wrote in a post on X: “I strongly support free markets. But this corporate large-scale buying of residential homes seems to be distorting the market and making it harder for the average Texan to purchase a home.”

Hinojosa pushed bills in the most recent legislative session to require tracking of investor activity and to prevent investors from purchasing homes for at least 30 days after they first hit the market. Neither measure advanced.

Abbott vetoed a 2023 bill that would have required the Texas Real Estate Research Center at Texas A&M University to track institutional buyers’ activity in the state’s housing market, doing so alongside other bills as part of an effort to pressure Republican legislators to reach a deal on property tax cuts. The following year he called on lawmakers to rein in investor homebuying.

An Abbott representative did not directly answer questions about his current stance on banning institutional investors, the Texas Tribune reported, referring a reporter to his past comments. Hinojosa’s campaign did not return requests for comment.

What economists say

Housing economists said the political push targets a force that accounts for a small share of the nation’s housing stock and that a ban would not address the underlying shortage.

“Declaring a ban on institutional investors works as a political talking point,” said Daryl Fairweather, chief economist at Redfin, an online real estate brokerage. “It works in terms of it emotionally resonating with people who understand the problem but don’t necessarily understand what the right solution is. The real solution, which is to build more homes in the places that people most want to live, is much harder for the President to achieve.”

Edward Pinto, co-director of the AEI Housing Center at the conservative American Enterprise Institute, was direct about the limits of a purchase ban. “If you stop them from buying, will it result in more housing construction? No,” Pinto said.

Daniel Oney, research director at the Texas Real Estate Research Center, said he has not seen convincing evidence that institutional investors have driven the state’s housing prices upward. “We see a role for (institutional investors), and regulating them may not actually have that big of an impact on home prices,” Oney said.

Texas, by one commonly cited estimate, needs 319,500 additional homes of all kinds. Nationally, the country is short millions of housing units, according to various tallies.

How large is the investor footprint?

Large institutional investors own between 1% and 3% of the nation’s single-family housing stock, according to estimates. In Texas, corporations that own 100 or more units held less than 1% of the state’s single-family housing stock as of June 2025, per American Enterprise Institute estimates. Smaller landlords owning between two and nine properties hold about 13.2% of the state’s single-family homes; owners with 10 to 99 homes account for about 1.8%.

The investor share was higher during the pandemic. Institutional investors bought 68,482 homes in Texas in 2021 — 14.2% of all homes sold in the state that year — up from 26,735, or about 7%, in 2019, according to ATTOM Data Solutions, which tracks property transactions. ATTOM defines institutional investor purchases as residential property sales to non-lending entities that purchased at least 10 properties in a calendar year. The Dallas-Fort Worth and Austin regions were particular hot spots in 2021 and 2022. In the Houston area, institutional investors bought more than 15,000 homes in 2021, more than 13% of sales, up from fewer than 4,500, or about 5.3%, in 2019.

Investors have since pulled back and are now selling more homes than they buy, Fairweather said. Those homes are currently rented to tenants who may not be able to afford to purchase them, she noted — a factor she said complicates a blanket ban.

“When you ban institutional investors, you’re potentially banning the people who might not otherwise have access to local schools in single-family neighborhoods or other amenities in those neighborhoods,” Fairweather said. “That reinforces income segregation and racial segregation.”

What would actually address affordability

Experts said the path to lower housing costs runs through supply: faster permitting, smaller homes on smaller lots, and a wider variety of housing types — duplexes, townhomes, smaller apartment buildings — in places currently zoned only for single-family construction. The power to make those changes rests largely with states and cities, though the federal government could pass measures encouraging local governments to act, economists said.

Texas enacted several supply-side measures during its 2025 legislative session, including laws allowing smaller homes on smaller lots and permitting apartments in commercial areas in major cities. Abbott signed those measures; Hinojosa voted for them. Austin has relaxed local zoning regulations to allow more construction in recent years, though most other major Texas cities have not.

Housing advocates have noted that firms with large portfolios of single-family homes acknowledge they are less profitable in markets where more housing is allowed to be built — a dynamic that experts said underscores the case for supply-side reforms over purchase restrictions.

Would-be homebuyers might gain a modest competitive edge if laws forced investor-owned homes back onto the for-sale market, some experts acknowledged, because it would increase available supply. But that injection would not be large enough to substantially move prices, they said — and pulling homes from the rental market would likely push rents higher.