To hear President Donald Trump tell it, he’s bringing back the American dream of mass home ownership.
Unfortunately, at this moment, “because of the Record High Inflation caused by Joe Biden and the Democrats in Congress,” the American dream is more of a pipe dream for many. “[E]specially younger Americans,” Trump wrote on Truth Social on Jan. 7.
The president announced that he was “immediately taking steps to ban large institutional investors from buying more single-family homes” through administrative measures (possibly through an executive order or the normal notice-and-comment regulation process) and also called for Congress to “codify it.”
Trump’s justification for a ban on further home sales to equity firms was that “people live in homes, not corporations.” He said the ban, as well as other housing moves, would be the subject of his address to the World Economic Forum in Davos, Switzerland, in mid-to-late January.
He followed that by ordering government-sponsored loan guarantors Fannie Mae and Freddie Mac to buy $200 billion worth of mortgage bonds. That $200 billion promise moved markets, which did not view it as a trial balloon.
Trump then said credit for the dip and promised more to come.
“With my focus on Housing Affordability, and after I authorized Fannie Mae and Freddie Mac to invest their cash, and BUY $200 Billion Dollars in Mortgage Bonds, Mortgage Rates moved down to 5.7%,” he wrote, days later. “We are bringing Housing Costs DOWN, and putting Americans FIRST!”
No more six-sevens?
Rates have gone back up some, but are still low by recent standards. At press time, America’s 30-year fixed mortgage rates were just over 6%. It is debatable how much of an effect the president’s promised private equity limitations had on larger markets, although it did exert downward pressure on the stock prices of many firms heavily invested in housing, including rental properties.
“Shares of Blackstone were down 5.58%, and Invitation Homes was down 6.01% … after President Trump’s post,” the trade publication National Mortgage Professional pointed out. “Some of the nation’s homebuilders, including PulteGroup, DR Horton, and Lennar also saw their stock stumble slightly amid the news.”
The promise of increased government investment in mortgage-backed securities has some analysts predicting lower mortgage rates this year.
“Our existing forecast for 2026 has average mortgage rates staying slightly above 6% through the coming year,” Zillow analyst Mischa Fischer wrote. “However, the recent announcement that the government-sponsored enterprises are being instructed to purchase $200 billion in mortgage-backed securities resulted in a 22 basis-point drop in rates on the first day following the announcement as the market priced in that expectation.”
Markets briefly saw a 30-year mortgage rate of 5.99%, which Fischer explained was “below the potentially important psychological threshold of 6%.” Moreover, he ventured that if the “announced plan to purchase mortgage-backed securities is implemented as expected, average mortgage rates could drop to 5.8% in 2026.” That is below the 6.1% rate that Zillow previously forecasted.
There is some historical precedent for government interventions like this, which have helped bring interest rates down. For instance, the Federal Reserve took over $1 trillion in mortgage bonds onto its balance sheet during the COVID-19 pandemic. Those purchases coincided with very low interest rates.
America’s graying housing market
Trump is not wrong in his assertion that younger buyers face something like an affordability crisis when it comes to buying homes. First-time buyers have fallen to a historic low of 21% of buyers for the last fiscal year, which ran from mid-2024 to mid-2025, according to a report by the National Association of Realtors.
The latest cohort is also significantly older than past first-time homeowners, with the median first-time home buyer having recently celebrated their 40th birthday. For contrast, “In the 1980s, the typical first-time home buyer was in their late 20s,” the NAR reported.
There are multiple culprits responsible for this graying housing market, including very high real estate prices in some states. Though the NAR phrased it more delicately, it essentially asked first-time home buyers, “What took you so long?” and got an earful.
“First-time buyers who are successful in purchasing cite high rent and student loans as two foremost costs that hold them back from saving,” was one of the findings.
To the extent that equity firms are driving those higher rents, they could, in theory, be holding back home ownership. A common charge is that equity firms are first outbidding would-be homeowners or local landlords and then jacking up rents to service the debt incurred by buying up so much real estate at inflated prices.
Ryan Kent Smith, a managing broker and lead of John L. Scott Real Estate based in Washington state, favors some curbs on private equity ownership of single-family units, as he does not believe the current setup gives first-time homebuyers or mom-and-pop landlords a fair shake.
“As a liberty-priority focused person, it’s with great caution that I would encourage laws that limit investment,” he said.
However, Smith reckoned it “simply untenable to have the investment equivalent of Larry Bird, Michael Jordan, and John Stockton challenge a trio of preschoolers in basketball. Financially, that represents a mild example of what billion-dollar hedge funds are by comparison with newlywed first-time homebuyers, fresh out of college, saving dollar by dollar from farm jobs or side gigs since [the age of] 14.”
However, he cautioned against going too far with legal curbs.
“Giant hedge funds generously contributing toward a trend that puts home prices out of reach for virtually all young or aspiring buyers … should have some guidelines or practical limitations,” Smith said.
At the same time, he’s “concerned” that in codifying this limitation, Congress could go “too far” and end up “harming ordinary, traditional investors of several homes.”
Some economists have pushed back against the notion that institutional investors are driving up single-family home prices. The current figures in home ownership and single-family rentals, they argue, do not support the charge that equity firms are cornering or dominating the larger market.
VENEZUELA COMMITS TO RELEASING ‘IMPORTANT NUMBER’ OF POLITICAL PRISONERS
By the numbers, the share of “single-family rentals owned by large investors remains small” with “large institutional investors own[ing] just over 3% of the single-family rental stock.” Those findings were presented in a 2023 report by Ingrid Gould Ellen and Laurie Goodman, scholars at New York University and the Urban Institute, respectively, for the Brookings Institution.
Note that 3% was the total ownership share of all large investors in the single-family housing market, not just one company or even just one sector in the form of private equity groups. If private equity ownership has minimal effects on rental and housing prices, and the numbers indicate that it probably does, then curbing future buying will not have the sort of affordability effects that Trump is shooting for.
Jeremy Lott (@jeremylottdiary) is the author of several books, most recently The Three Feral Pigs and the Vegan Wolf.