In a bid to bring down housing prices, President Trump has signed an executive order banning institutional investors from purchasing family homes.
With prices edging higher each month currently, but with little sign of a further easing in mortgage costs from the Federal Reserve, politicians are under pressure to ease the financial burden of owning a family home.
Political pundits say this initiative is an effort to bolster Republican support for the midterm elections due in November.
The next step in enacting the executive order will be for the Treasury Secretary Scott Bessent to develop definitions of an “institutional investor” and a “single-family home”.
Work also needs to be carried out to stop institutional investors being able to insure or assist in the acquisition of a single-family home.
The President said Wall Street investors’ purchasing of family homes has created a level of scarcity that has affected values. He criticised how investors are now in competition with “hardworking young families”.
The executive order says: “Buying and owning a home has long been considered the pinnacle of the American dream and a way for families to invest and build lifetime wealth.
“That American dream has been increasingly out of reach for too many of our citizens, especially first-time homebuyers.
“Neighborhoods and communities once controlled by middle-class American families are now run by faraway corporate interests. People live in homes, not corporations. My administration will take decisive action to stop Wall Street from treating America’s neighborhoods like a trading floor and empower American families to own their homes.”
Attorney General Pam Bondi and Federal Trade Commission Chair Andrew Ferguson will “prioritize enforcement” of the antitrust laws against coordinated vacancy and pricing strategies by institutional investors in local single-family home rental markets.
It’s understood many real estate trusts and private equity firms have collected a considerable number of single-family homes.
The President said at the World Economic Forum in Davos recently that Americans would not “become a nation of renters”. He also called on credit card interest rates to be capped at 10%, which he said would also help aspiring homeowners.
Several anticipated proposals for the mortgage industry were not announced, including a plan to lower mortgage insurance premiums.