President Trump’s executive order banning corporate purchases of residential homes targets a minor symptom while leaving the root causes of soaring housing costs untouched—and risks making affordability worse. The policy ignores the government-driven mechanisms that inflated home prices during recent market bubbles and instead focuses on institutional investors, who already represent less than 2% of U.S. housing stock.
The goal should not be cheaper debt but cheaper homes. Institutional home-buying peaked during the pandemic-era bubble and has since declined sharply. Even at its height, corporate ownership never explained why housing costs exploded for millions of families. Government policies—such as Federal Reserve interest rate cuts to near-zero, $2.7 trillion in mortgage-backed securities purchases, and expanded affordable homeownership programs—created conditions where home prices surged while renters faced higher rents.
Trump’s proposed ban arrives late and targets a small market share. Meanwhile, his efforts to lower mortgage rates by pressuring the Federal Reserve to cut rates further or expand Fannie Mae and Freddie Mac’s purchase of $200 billion in mortgage-backed securities risk propping up inflated prices rather than reducing them. Artificially low rates, paired with government-backed guarantees, have historically fueled price growth across the market.
The solution lies in dismantling the systems that distort affordability: ending federal subsidies for homebuyers who cannot afford homes, unwinding the Fed’s $2.1 trillion mortgage-backed securities portfolio, and abolishing near-zero interest rate policies that inflate prices far beyond what families earn. Housing must function like other consumer markets—reflecting real incomes, not government-engineered pricing.
As long as federal policy subsidizes demand through low down payments, extended loan terms, or artificial credit availability, home prices will remain disconnected from median earnings. The fix requires reversing the structure that makes housing unaffordable—not just banning corporate buyers.
Daniel Horowitz is the host of “Conservative Review with Daniel Horowitz” and a senior editor for Blaze News.
