US Treasury to restrict home purchases by large investors — The Hill
The US Department of the Treasury has announced regulatory changes that provide for a ban on large institutional investors purchasing single-family homes starting January 7, 2027. The restriction will have specified exceptions and is part of the implementation of the bipartisan housing law passed by Congress in July, The Hill reports.
Who the ban will apply to
The 21st Century Road to Housing Act defines a large institutional investor as an entity that directly or indirectly controls investments in at least 350 homes. The ban will not apply to purchases under programs for building housing for subsequent rental, renovating housing for rental, and programs intended to increase homeownership rates.
The legislation was supported by Democratic Senator Elizabeth Warren and Republican House Representative French Hill. It is intended to shorten federal review procedures for housing construction projects and increase the housing supply in the United States. The law took effect in July without the signature of President Donald Trump.
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Housing market situation
Treasury Secretary Scott Bessent said the administration seeks to expand opportunities to purchase affordable housing for young and working families by increasing supply and limiting the role of large institutional investors in the market.
At the same time, housing experts point out that Wall Street investors own too few homes to significantly affect prices. In January, Zonda Vice President of Economic Research Sean Fergus told The Hill that, depending on the criteria used to define an institutional investor, they own approximately 500,000 to 800,000 homes. Even the upper end of this estimate accounts for less than 1% of the roughly 100 million single-family homes in the country.
US home sales are slowing amid high mortgage rates: the number of pending home sales in September declined by 7.3% compared with August. According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage that week was 7.32%.
