Treasury moves to ease access to single-family home purchases ahead of midterms

The Treasury Department on Thursday moved to implement tenets of a bipartisan housing law Congress passed over the summer, including a ban on institutional investors buying single-family homes.

Under impending regulations from the department, a large institutional investor cannot buy a single-family home starting on Jan. 7, 2027, with certain exceptions. 

The department is codifying the ban under the 21st Century ROAD to Housing Act, a landmark housing law both chambers passed with overwhelming majorities in July.

The likes of progressive Sen. Elizabeth Warren (D-Mass.) and Rep. French Hill (R-Ark.) championed the legislation, which is intended to reduce federal review processes for housing construction and boost the nation’s supply of units.

President Trump, however, did not sign the measure into law — as he protested Senate Republicans’ inability to pass voter ID legislation, one of his top priorities. The housing law took effect in July, without the president’s signature.

Trump earlier this year signed an executive order directing his administration to crack down on institutional investors purchasing single-family homes.

The new housing law defines a “large” institutional investor as an entity that has direct or indirect investment control over at least 350 homes. It exempts multiple types of purchases from the ban, including those made under build-to-rent programs, renovate-to-rent programs and programs to boost homeownership.

Treasury Secretary Scott Bessent said in a Thursday release the administration “continues to restore the path to affordable homeownership for millions of young and working families.”

Bessent added, “Treasury is working to ensure American families and workers have a fair shot at purchasing homes in their communities by increasing housing supply and limiting large institutional investors’ role in the market, while supporting a strong, stable housing market and avoiding unnecessary disruption.”

The Treasury Department unveiled the regulations less than two weeks before the midterm elections, as Republicans fight to keep control of Congress in the face of Americans’ growing economic frustrations.

However, housing experts say Wall Street investors do not own enough homes to significantly skew housing prices.

“Depending on the threshold used to classify an investor as institutional vs. a mid-sized investor, the total homes owned ranges from approximately 500,000 to 800,000,” Sean Fergus, the vice president of economic research at Zonda, told The Hill in January. “Even assuming the high end of that range, it’s only 0.5 percent of total units and still under 1 percent of the roughly 100 million single-family homes in the country.”

Housing sales have slowed amid high mortgage rates. Pending home sales decreased by 7.3 percent from August to September, according to the National Association of Realtors, and Freddie Mac reported Thursday that the average 30-year fixed mortgage rate this week was 7.32 percent. 

Also on Thursday, Trump signed an executive order aimed at lowering government-backed mortgage payments.