Real Estate Stocks Plunge on Trump's Proposed Investor Ban
Invitation Homes and American Homes 4 Rent lose over $1.5 billion in value after the former president vowed to block institutional buying of single-family houses.
Shares of the largest single-family rental landlords in the U.S. fell sharply after former President Donald Trump pledged to ban large institutional investors from buying single-family homes if elected. The proposal, aimed at addressing housing affordability, sent shockwaves through the real estate investment trust (REIT) sector.
Invitation Homes (NYSE: INVH), the nation's largest owner of single-family rentals, saw its stock price fall by over 6%, while its primary competitor, American Homes 4 Rent (NYSE: AMH), dropped more than 4% in trading. The sell-off wiped out more than $1.5 billion in combined market capitalization from the two companies, reflecting investor anxiety over a potential unwinding of the institutional rental industry.
In a post on his social media platform, Trump stated the move was intended to help "restore the American Dream," arguing that large corporations are pricing families out of the market. According to reports from Fox Business, the proposed policy would restrict the ability of hedge funds and other large investment firms to purchase homes, potentially through executive action or by calling on Congress to pass legislation.
The market’s reaction was swift and decisive. Invitation Homes, which has a market capitalization of roughly $17 billion, and American Homes 4 Rent, valued at over $13 billion, represent the pinnacle of an industry that emerged from the 2008 financial crisis. These firms bought tens of thousands of foreclosed properties, professionalizing the management of rental homes and turning single-family properties into a distinct institutional asset class. Invitation Homes now operates a portfolio of nearly 80,000 homes across the country.
The potential for a federally enforced ban, or even forced selling, strikes at the core of their business model, which relies on continuous acquisition and scale to generate returns for shareholders. While the legal and practical feasibility of such a broad prohibition remains unclear, the political rhetoric alone was enough to spook investors.
Analysts note that institutional investors own a relatively small fraction of the overall U.S. single-family housing stock—estimated at less than 5%—but their activity is often concentrated in high-growth Sun Belt markets, where their impact on local prices can be more pronounced. This has made them a visible target for politicians addressing the national housing affordability crisis.
For now, the sector faces a new layer of political risk. While the long-term viability of Trump’s proposal is uncertain and would likely face significant legal and logistical challenges, the announcement introduces a significant headwind for a sector that was already navigating a complex macroeconomic environment of high interest rates and shifting housing demand. The volatility is likely to persist as investors weigh the probability of such a policy against the strong underlying demand for rental housing.