Trump to Ban Institutional Investors From Buying Homes
I am immediately taking steps to ban large institutional investors from buying more single family homes.
Speaker 2:We're also seeing BlackRock stock dropping. We're seeing Invitation Homes stock dropping. What a way to start off January, Threatening institutional investors in in rentals. Hey, everybody. Welcome to another episode of Landlord Lens.
Speaker 2:We have some breaking news and a very important quote by a very important person. Seamus, why don't you read the quote from our president Donald Trump?
Speaker 1:Yeah. Happily. Posted to social media today. I am immediately taking steps to ban large institutional investors from buying more single family homes, and I will be calling on Congress to codify it. People live in homes, not corporations.
Speaker 1:Once again, that was written by Trump on social media.
Speaker 2:That's right. What a way to start off January, Threatening institutional investors in rentals.
Speaker 1:Yeah. And we know institutional investors, right? These corporate landlords we often talk about represent anywhere between one to 3% of the single family market in The United States. And the thought there is if he stops allowing them to purchase new properties, it will create more supply for all the pent up demand, people looking for primaries, maybe even our DIY audience out there.
Speaker 2:Yeah. I think there's a lot to unpack here, and we've been sitting here kind of talking through and digesting it. But first, I think it's worthwhile to notice what impact it's having on markets already. The Google Trends is showing a huge spike in the term institutional investors.
Speaker 1:Because what does that even mean, right?
Speaker 2:What is an institutional investor? Let me Google that. We're also seeing BlackRock stock dropping. Yep. We're seeing Invitation Homes stock dropping.
Speaker 2:Are there any other stock tickers you saw fall off?
Speaker 1:There were some in the construction field that were taking a little bit of a beating. But like so many things that are put out from this administration, the markets are the first to react. Good or bad, in this case, it's bad for a handful of the major players out there.
Speaker 2:Exactly, because you can take two different kinds of signals from this. The first signal is, yay. Hedge funds had no business being in single family homes anyway, and it's just gonna be hedge funds, and this is great news. The second one is, uh-oh, Trump's gonna start regulating the national housing market nationally from his president's chair generally, which means that anybody that owns homes might be impacted.
Speaker 1:Yeah. Exactly. I actually think that it's quite popular to make corporate landlords the boogeyman. Right? We've done it in some of some of our videos, we know that they're often the fastest to raise rent, They don't have great track records always in maintenance on their properties.
Speaker 1:They're not usually investing in a community, right? They're there for relatively short periods of time to get their ROI, and then they're flipping those properties and communities. So
Speaker 2:They can afford to be litigious. They have law firms on retainer.
Speaker 1:It's Oh, they lobby. Like, the regulation at times seems like it should hurt them, but it actually helps them. Yep. Right? And so I think there's a lot of reasons for, regardless of where you are on the political spectrum, to be kind of excited to actually see the institutional buyers take a beating.
Speaker 1:Yeah, absolutely. However, first it starts with institutional buyers, If this doesn't work or create the supply that they want, does it then go to individuals that own 500 plus units, right? And is it then 100 plus units? And then eventually is it getting down 20 plus units and a lot of the DIY landlords that are out there trying to create wealth and a legacy for themselves?
Speaker 2:Yeah. Which can be pretty scary to think about because this is an unprecedented action from Washington trying to regulate the housing market as it exists. He's he's not wrong that you know, he he calls out here that owning a home was long considered the pinnacle of the American dream, and that's the case. But trying to regulate it from this seat is pretty much brand new, besides making it more affordable with the thirty year mortgage and and that kind of thing. Right?
Speaker 1:Yeah. And I I think this is hopefully just another kind of arrow in the quiver of increasing affordability. I really would love to see more emphasis on some of the deregulation so that more building can just take place. We see places like in Texas where the average home price has actually dropped, rent prices have actually come down because there's been an absolute building spree. Right?
Speaker 1:Now, some people may be looking at that maybe as a landlord out there or a primary and saying, hey, you know, the value of my asset is dropping. But I think for the general good of the community, these communities, right, and people able to pursue that American dream, it is important that people can afford to own a home. Exactly.
Speaker 2:Well, let's talk about some of our speculation with regard to how this will impact builders, how these companies like BlackRock or Invitation Homes who've built their entire company, right, off of single family rentals, how we would expect an implementation of this to actually look, right? Because right now we're only looking at two paragraphs of text.
Speaker 1:Yeah. It's it's pretty sparse on details, like like the introduction of so many of these things. I'm usually in the camp of just voting that nothing will actually happen, right? But I've certainly been wrong before. I took a similar stance on things like tariffs, right?
Speaker 1:And then widespread tariffs were indeed applied and then changed throughout all of 2025. So I think for them to move forward and try to ban this, they're gonna do it on, from what it appears, on net new purchases going forward. So there's definitely gotta be a lot of construction projects right now that are those build to rent projects that right now are kind of on a shaky footing, right? Will the BlackRock, will Invitation Homes, will progress be there to make those purchases, right? And if not, my hope is those construction companies open it up to the public.
Speaker 1:Right. Right? Which then creates that supply that we're looking for to fill the demand that we know exists out there.
Speaker 2:Absolutely. So if that's the case, and that's I think a reasonable way to read what he said, preventing them from buying, right?
Speaker 1:Yeah.
Speaker 2:Why do you think that builders that are traded on the stock exchange dropped? Why did traders feel differently?
Speaker 1:I think there's some risk to the business as a home builder, right? If you're a home builder and one of your clients is one of these large institutional buyers, right, these corporate landlords, then at the end of the day, you're losing a customer, right? A customer with very deep pockets, a customer that's aggressive in trying to build, and so it changes the dynamics of your business. So I think anytime there's any insertion of risk in a business, you can anticipate that the stock is going to drop.
Speaker 2:Yeah. Well, I'm interested too in the speculation you said well, well, you shared you don't think it's gonna happen. Right? And and you you caveated that by pointing out that you've been wrong before on that assumption. But I think there's reason to believe that this could take up significant time in session and possibly move through because a lot of Democrats have put forward legislation that, like, forces hedge funds to sell off rentals.
Speaker 2:I don't know if they've put forward things that are generally something that would impact Invitation Homes directly, But I I could see some popular support motivating Democrats to get behind something like this.
Speaker 1:Oh, absolutely. I think this is the kind of thing that Mundamy would be fist bumping. Yeah. Right? President Trump for for the introduction of this.
Speaker 1:So yes, I do think from that perspective there is a real opportunity that even some moratorium, right, some period of time where they're not able to participate in the housing market could go in place, which would be super interesting. There's been so many other ideas thrown around from deregulation to even selling off some of the federally owned land. Yeah. Right? To make it affordable to
Speaker 2:Yeah, I forgot about that. That was crazy.
Speaker 1:Yeah, but that was all the rage only, what? A year ago. A year ago. Yeah, So from that perspective, I think there's a lot of levers that the administration's trying to put in play that's going to fix this affordability. It's hard to know which one they're going to pull the hardest.
Speaker 1:It's hard to know the large impact of each of them. We just talked about a fifty year mortgage too. And so there's no doubt this administration likes to layer different things, layer different tactics in order to solve the solve the problems they've identified.
Speaker 2:Wow. Wild. Well, I'm looking forward to talking about this more, assuming it does get some congressional attention or they do something unilaterally that'll get challenged in the courts. Either way, we've got news to talk about, and definitely something that will strike, I think, right at the heart of pretty much all the housing issues that our audience cares about.
Speaker 1:Absolutely. And I'll tell you one group whose stock did not drop, and that's lobbyists in Washington. Washington. It is a it is a great day to be a lobbying firm employed by the BlackRock, Progress, Invitation Homes of the world because you're going to be on the clock until they resolve this.
Speaker 2:If you own rentals in a market dominated by institutional investors, of which there's several, we'll pull up a list right here, please let us know. Let us know what it's been like to to share a market with them. We're definitely interested. We'll definitely talk about this topic a little bit more over the coming weeks, and yeah, like and subscribe for more content like this.
