Why Banning Wall Street From Housing Won’t Fix Home Prices
For the last several weeks, housing policy has suddenly become a political weapon.
On January 7, 2026, President Trump announced he wants to ban institutional investors from buying single-family rental homes, framing it as a way to protect everyday Americans and restore housing affordability.
The soundbite is powerful:
“People live in homes, not corporations.”
But the data tells a very different story.
And if we don’t understand what actually happened in the housing market over the last decade — especially in Sun Belt states like Florida — we’re about to make things much worse, not better.
Wall Street Didn’t Break Housing — It Amplified a Bubble the Fed Created
Institutional investors did not invent the housing boom.
They reacted to it.
After the 2008 crash, private equity and REITs stepped in to buy foreclosed homes in bulk, turning single-family rentals into a real asset class for the first time.
These firms — companies like Invitation Homes, Progress Residential, American Homes for Rent, Tricon, and Amherst — focused on:
1,400–2,000 sq ft homes
3–4 bedrooms
Suburban Sun Belt metros
Strong migration inflows
Attractive rent-to-price ratios
At the time, this made sense. In 2014 those homes cost $160,000–$180,000. Today many are worth $400,000–$450,000.
They weren’t guessing — they were following:
Fed-driven zero-interest rate policy
Post-COVID relocation and migration
The same forces that pushed everyday buyers into bidding wars.
Institutional Buyers Are Not as Big as You Think
One of the biggest myths on social media is that “Wall Street owns all the houses.”
That’s false.
Let’s break it down.
There are 14 million single-family rental homes in the U.S.
Institutional investors own less than 1 million of them.
That means 78.6% of single-family rentals are owned by mom-and-pop landlords — people with 1 to 9 properties.
Large institutional landlords (1,000+ homes) control only 3–5% of the SFR market nationally.
So when headlines scream:
“Institutions bought 13% of homes in 2021”
That stat is misleading — because it lumps small landlords and REITs together.
Those are not the same thing.
Yes, Institutions Were Heavy Buyers — But Only in a Few Cities
This is where nuance matters.
Institutional investors didn’t dominate the entire U.S. housing market.
They concentrated in specific Sun Belt metros, especially:
Atlanta
Jacksonville
Charlotte
Raleigh
Tampa
Orlando
Phoenix
Las Vegas
Indianapolis
In Jacksonville, institutional buyers captured 20–21% of the single-family rental market by 2022.
That capital absolutely pushed prices higher.
But something even more important happened…
Wall Street Caused Builders to Overbuild — and That’s Why Prices Are Now Falling
This is the part almost no one understands.
Institutional money gave builders guaranteed exits.
Builders knew:
“Even if regular buyers disappear, I can always sell to a REIT and rent it out.”
So they built.
A lot.
Entire rental subdivisions.
Entire build-to-rent communities.
Massive single-family and multifamily supply.
Then migration slowed.
Rates spiked.
Demand collapsed.
Now we have too much housing in exactly the same cities where institutional buyers were once active. Watch this video — it breaks it all down.
That’s why:
Rents are falling
Prices are falling
Inventory is surging
In Jacksonville, we now have an oversupply — both single-family and multifamily — and landlords are cutting rents.
That’s not a coincidence.
That’s mean reversion.
Here’s the Irony: Institutions Are Now Net Sellers
By late 2022, the math stopped working.
Higher interest rates killed leveraged returns.
Cap rates no longer covered financing.
So institutions stopped buying.
Today, outside of build-to-rent, they are net sellers, trimming portfolios.
That makes the ban bizarre.
Why ban buyers that already left?
It’s like closing the barn door after the horses are gone.
The Real Villain Is the Federal Reserve
Housing didn’t become unaffordable because Blackstone bought homes.
It became unaffordable because the Fed ran zero interest rates for years and flooded the system with liquidity.
Cheap money:
Drives asset bubbles
Inflates home prices
Encourages speculation
Rewards leverage
Now the government is proposing to:
Force Fannie and Freddie to buy $200B of mortgage bonds
Artificially lower mortgage rates
Socialize future losses
Keep prices elevated
That’s not affordability.
That’s price control by another name.
Why Banning Institutional Buyers Will Backfire
If you remove institutional capital, you also remove:
Builder liquidity
Exit strategies
Rental development
Supply creation
Build-to-rent communities grew 102% in 2023 because REITs were willing to buy them.
Cut that off, and builders stop building.
Less supply = higher prices.
Exactly the opposite of what we need.
The Only Real Fix Is Letting Prices Fall
I know this is uncomfortable.
But it’s true.
The next generation does not need:
50-year mortgages
Government-bought MBS
Institutional bans
Artificial demand
They need prices to come down.
Housing has risen over 68% in five years in Florida.
That is not sustainable.
Affordability only returns when markets clear.
And right now, they finally are.
Final Thought
Wall Street didn’t break housing. The Federal Reserve did.
Institutional capital merely rode the wave — and in doing so, created the very oversupply that is now correcting the market.
Banning them now won’t fix prices.
If we want the next generation to own homes, we have to stop manipulating the market and let prices fall.
Even if it hurts politically - yes, really.
e: jon@movewithmomentum.com
w: thinkbigquestioneverything.com
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