President Donald Trump last week unveiled two new proposals focused on the cost of housing in the United States — an issue central to Americans’ economic disillusionment.
On Wednesday (7), Trump stated in a post on social media that would take steps to ban large institutional investors from buying more single-family homes, adopting a strategy similar to that of Democrats.
The next night, he published a cryptic statement about the government’s purchase of $200 billion in mortgage bonds in an attempt to reduce interest rates and monthly payments.
He said more details will be released later this month.
However, according to most analyses, Trump’s proposals do not address the main factor driving home prices: lack of supply.
The United States needs about 4 million more homes to make housing prices affordable again, according to the Goldman Sachs Research.
Ban big investors
“It’s not going to change anything in terms of affordability,” Jake Krimmel, senior economist at Realtor.com, told me, referring to the proposed ban on the purchase of single-family homes by Wall Street investors.
“While these large institutional owners are certainly the villains in the headlines, they are a smokescreen when it comes to the real shortages and affordability issues we have seen in the US for over a decade.”
When using the term “institutional investors,” Trump is referring to investment companies like those run by some of his billionaire alliesincluding Blackstone, which owns hundreds of thousands of apartment complexes, mobile home parks and single-family homes across the United States.
Real estate has been a profitable institutional investment since the housing market collapse in 2008. The financial sector raided desirable neighborhoods to buy properties that suddenly became cheap and began charging rent on these properties.
Estimates of the scale of these purchases vary, but a study from the Brookings Institution found that between 2012 and 2019, about 240,000 single-family homes were owned by institutional investors.
This made Wall Street a frequent target of Democrats, who argued that the practice drove up prices and prevented potential first-time buyers from the opportunity to build wealth.
But large investors still represent a tiny portion of the total market.
Large institutional investors — those who own more than 1,000 properties — represented between 1% and 3% of homes purchased in 2025, says Krimmel.
This is a relatively small slice of the market, and has been shrinking in recent years as interest rates have risen. The vast majority of investment property purchases come from small homeowners — people who own one or two additional homes that they rent out to supplement their income.
Of course, in some markets, particularly Sun Belt cities, institutional investors represent a much larger share.
A 2024 Government Accountability Office (GAO) study found that large investors owned 25% of rental properties in Atlanta; 18% in Charlotte, North Carolina; and 14% in Phoenix, for example.
But even if it were eliminated all institutional ownership, says Krimmel, is unlikely to make much of a difference because housing stock in these cities is already rising steadily, keeping prices in check.
The financing proposal
Trump’s other proposal for real estate would take a more technical and financial approach.
“I am instructing my representatives to purchase $200 billion in mortgage bonds,” he wrote on Truth Social on Thursday.
“This will cause mortgage rates to fall, monthly payments to decrease and make the cost of owning a home more affordable.”
This plan would involve the federal government, through Fannie Mae and Freddie Mac, purchasing a large amount of mortgage-backed securities — something the Federal Reserve traditionally does in times of turmoil to prevent interest rates from spiking.
To be sure, many economists have argued that increased purchases of mortgage bonds would help lower mortgage interest rates, offering some relief to homebuyers. But, once again, this measure does not increase the supply of housing.
And it probably won’t encourage people to sell the homes they currently live in and look for something else, known as the “lock-in effect.”
“Broadly speaking, I believe this is just a stopgap solution to a deeper problem and would probably not lower rates enough to actually undo the effect of freezing mortgage rates,” Daryl Fairweather, chief economist at real estate brokerage Redfin, told the Associated Press.
Historically, though, mortgage rates around 6% are not uncommon — it’s chronic supply shortages that have driven the median home price to about $410,000, an increase of nearly 30% since 2020.
Challenge for the government
So could Trump or Congress do something to improve the situation in relation to financial accessibility?
“This is a really difficult endemic problem. There’s a reason that not only hasn’t it been solved, but it’s gotten worse over time, because it’s so complex,” he said.
“What can the federal government do? It can create incentives for state and local governments to increase supply, to meet demand where it exists. How does this translate into practice? It means establishing standards and guidelines to simplify the licensing process or increase the capacity of zones”, in other words, allowing the construction of higher density housing.
