New York — As President Donald Trump continues to grapple with low approval ratings and economic discontent, he has set his sights on a new target: Wall Street. With the midterm elections approaching, Trump is pivoting from previous blame placed on President Joe Biden and the Federal Reserve, instead focusing on institutional investors as a major contributor to rising housing costs.
In recent announcements, Trump outlined proposals aimed at curbing the influence of large Wall Street investors in the housing market, a move that mirrors strategies typically advocated by progressive Democrats. This week, he declared intentions to prohibit institutional buyers from purchasing single-family homes, asserting that such actions would stem the tide of rising home prices and promote affordability. In a subsequent social media post, he proposed a government purchase of $200 billion in mortgage bonds to lower interest rates and monthly payments for potential homebuyers.
However, experts warn that these proposals may not effectively address the root causes of the housing crisis. Currently, the primary issue fueling rising home prices is a severe shortage of available properties. Housing experts estimate the U.S. needs an additional 4 million homes to restore affordability levels to pre-pandemic standards.
Real estate economist Jake Krimmel argues that Trump’s focus on Wall Street investors is misguided. He points out that while these large firms often attract media attention as the villains of the housing market, they represent a small fraction of overall purchases. In 2025, institutional investors owned only 1% to 3% of homes sold, with “mom-and-pop” landlords accounting for the majority of real estate transactions.
While major institutional players like Blackstone and others have made notable investments in residential properties, their impact is limited when compared to the general market landscape, especially as rising interest rates have curtailed their purchasing power. In certain cities, particularly in the Sun Belt, institutional investors own a more significant share of the rental market. For example, a Government Accountability Office study found they held 25% of rentals in Atlanta and 18% in Charlotte. Yet, even stopping all institutional purchases may not drastically alter price dynamics, as inventory continues to grow in these markets.
Trump’s mortgage bond initiative has been labeled as a potential short-term fix rather than a sustainable solution. By instructing the government to acquire a large volume of mortgage-backed securities, the plan aims to lower interest rates, providing temporary relief for homebuyers. Still, it does not address the essential issue of housing supply.
Economists express a skepticism towards both of Trump’s proposed measures. They contend that simply boosting demand without increasing supply will not yield significant long-term benefits. The historical context reveals that mortgage rates around 6% are not unprecedented. The more pressing concern is the chronic inventory shortage that has exponentially driven up home values.
Experts suggest that meaningful progress on housing affordability would require more than populist rhetoric. They advocate for federal and local government initiatives to stimulate housing development, streamline permitting processes, and increase zoning capacity for denser building. Such measures, while complex and less captivating for campaign rhetoric, may be essential for addressing the systemic issues affecting the housing market.
As Trump navigates these proposals, the challenge remains: how to effectively address the affordability crisis without oversimplifying its roots or misplacing blame on convenient scapegoats. Addressing housing affordability will require a nuanced approach that acknowledges the relationship between supply and demand in a rapidly changing economic landscape.
