Posted originally on Jan 23, 2026 by Martin Armstrong |  

Donald Trump declared at Davos that America would not become a nation of renters, much to the dismay of the “you will own nothing and be happy” audience. Trump is now talking about banning large institutional investors from buying more single-family homes, claiming this is about restoring the American Dream and ending the insanity where “people live in homes, not corporations.”

Axios reported that investors bought roughly 1 in 3 single-family homes in Q2 2025 (using BatchData), and the entire debate now comes down to how they define “institutional investor” and whether Congress will actually codify it into law.

I understand the motivation, and I agree with the public anger. The question is whether this actually fixes the problem or just creates the next one. The real estate market did not become unaffordable because a few Wall Street firms bought houses. It became unaffordable because government destroyed purchasing power, drove up the cost of living, and then pretended the cure was more regulation.

Institutional investors did not wake up one day and decide to “ruin homeownership.” They responded to incentives. The system pushed capital into assets because people no longer trust paper promises. The moment confidence in government declines, capital moves.

Now, do I like the idea of hedge funds and giant landlords buying entire neighborhoods? No. But the real problem is supply and cost. If you don’t address zoning, property taxes, regulation, insurance, building costs, and the fact that mortgage rates have trapped millions of people in place, you’re not addressing the root issue. If they define “institutional” too broadly, you will end up crushing the small investor and the private builder who actually supplies rentals in markets where people cannot buy. Demand vanished because the monthly payment exploded.

Hence why there are over 37% more sellers than buyers in America’s real estate market. Institutional investors are merely on facet of a multi-layered problem.