President Donald Trump announced two major housing affordability initiatives this week, proposing to ban large institutional investors from purchasing single-family homes and directing Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds in an effort to lower mortgage rates.

The back-to-back announcements represent Trump's most aggressive push yet to address voter concerns about housing costs ahead of the November midterm elections. The president said Wednesday he would "immediately" take steps to ban large institutional investors from buying single-family homes and call on Congress to codify the measure.

"People live in homes, not corporations," Trump wrote on Truth Social. "For a very long time, buying and owning a home was considered the pinnacle of the American Dream. It was the reward for working hard, and doing the right thing, but now, because of the Record High Inflation caused by Joe Biden and the Democrats in Congress, that American Dream is increasingly out of reach for far too many people, especially younger Americans."

On Thursday, Trump followed up with a second announcement directing Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds, which he said would "drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable."

Institutional investor ban rattles Wall Street

Trump did not detail specific actions he would take to stop institutional investors from buying single-family homes. He said he would discuss the topic, along with other affordability efforts, at the World Economic Forum in Davos, Switzerland, later this month.

Shares in Invitation Homes, the largest renter of single-family homes in the country, plunged 6% after Trump's announcement. Blackstone and Apollo Global Management also fell roughly 6% and 5%, respectively.

After the 2008 financial crisis sent home prices nosediving, major investment firms swooped in to buy up the leftover inventory, often purchasing properties in bulk at foreclosures. Stephen Schwarzman's Blackstone is among those acquiring homes, last year controlling more than 230,000 units as the largest private-equity owner of U.S. apartments, according to the Private Equity Stakeholder Project, a nonprofit watchdog group.

A Blackstone spokesperson told the New York Post the company has been a net seller of homes for the past decade and its holdings are down by more than one-fifth.

Treasury Secretary Scott Bessent spoke about the plan during remarks before the Economic Club of Minnesota on Thursday. He said the administration hasn't settled on the "exact contours" of the move, but indicated there would be no plans to force institutional investors into retroactive sales.

"The idea here is bygones are bygones," Bessent said. "We're not going to have a forced sale here."

He also indicated that the administration is still determining the thresholds involved in the plan. "We want to keep families who rent out to their other family members," he said. "So, we will decide what the correct level is. Is it a dozen homes? Is two dozen? What? What makes you an aggregator?"

Mortgage bond purchase aims to lower rates

Trump's Thursday announcement directed unspecified "Representatives" to buy $200 billion in mortgage-backed securities. Federal Housing Finance Agency Director Bill Pulte, the head of the agency in charge of Fannie and Freddie, appeared to confirm their involvement.

"We are on it. Thanks to President Trump, Fannie and Freddie will be executing," Pulte posted on social platform X, quoting Trump's announcement.

Trump noted that because he chose not to sell Fannie Mae and Freddie Mac during his first term, the government-sponsored enterprises now have $200 billion in cash available.

Fannie and Freddie support the secondary market for mortgages by buying mortgages from originators, packaging them into bonds and selling those securities to investors. In some cases, the government-sponsored enterprises hold the securities in their own portfolios rather than selling them to investors.

Fannie and Freddie have already been adding to their portfolios of mortgages and bonds in an effort seen as trying to push down mortgage rates, Bloomberg has reported. Their combined holdings of loans and bonds they keep rather than sell on to investors rose to $234 billion, the most since 2021, with another $100 billion expected this year.

The 30-year mortgage rate averaged 6.16% in the week ending January 8, Freddie Mac announced Thursday. That's the lowest level since October 2024.

Mortgage-related stocks like LoanDepot and Rocket Companies rallied in after-hours trading following the news. Mortgage-backed securities also caught a bid relative to Treasuries.

Economists question impact on housing supply

Some economists argue that neither proposal will address the fundamental problem driving housing costs: supply.

"The housing affordability challenge is not a function of finance," Joe Brusuelas, chief economist of RSM, told Axios. "It's plentiful and a 6.25% mortgage is historically cheap."

"The problem is a function of supply. Under those conditions, all it would do is drive prices higher."

Kevin Erdmann, a senior affiliated scholar at the free-market Mercatus Center at George Mason University, questioned the premise of the institutional investor ban.

"First, just in terms of the scale of ownership among large investors, it's a small fraction of the stock of housing," Erdmann told the Washington Examiner.

He noted that over the past decade, investor ownership of single-family homes has declined. "It's really homebuyers that are, on net, outbidding the investors for single-family homes," he added.

Jerome Famularo, a quantitative research associate at the libertarian Cato Institute, said the ban could actually hurt the sales market for homes because it removes institutional investors from the pool of possible homebuyers.

"Usually, private capital infusions into any industry is a pretty good thing," he added. "If you take a neighborhood that has some houses that are dilapidated, smaller mom-and-pop investors, they might say, 'Eh, that doesn't look like a good investment opportunity.' The larger investor might say it does look like a good opportunity."

John Berlau, a senior fellow and director of finance policy at the libertarian Competitive Enterprise Institute, said the institutional investor ban "won't get to the root of the government-induced housing shortage, it will make things worse."

Political and market context

The national median existing single-family home price was $426,800 in the third quarter of 2025 after hitting a record high of $435,300 in the summer, according to the National Association of Realtors. The average rate on a 30-year fixed mortgage is 6.19%, according to Mortgage News Daily.

The median age for a first-time homebuyer hit 40 years old in 2025, according to the NAR. That's up from 38 years old in 2024 and 33 in 2020. First-time buyers accounted for just 21% of all U.S. home purchases in 2025, a new record low, the NAR said.

In certain cities, investment firms hold larger chunks of what historically would be starter homes, accounting for more than 20% of all home sales in Houston, Miami, Phoenix and Las Vegas during the pandemic. In 2024, institutional investors owned 25% of rental homes in Atlanta and 18% in Charlotte, according to a U.S. Government Accountability Office analysis.

Shortly after Trump's Wednesday announcement, Sen. Bernie Moreno of Ohio said he would introduce legislation in the Senate to codify the push, and Sen. Josh Hawley of Missouri suggested he might do the same.

Sen. John Fetterman of Pennsylvania was one Democrat who seemed intrigued by Trump's initiative. "I think, overall, that's a positive development," Fetterman told the Washington Examiner. "It seems to me like quite a positive thing, because obviously we're willing to find all the different kinds of ways to address the housing situation."