President Trump’s executive order targeting institutional investors in single-family housing is making headlines, but the actual impact, at least in the short term, may be more symbolic than structural. While the order sets a firm tone against large firms competing with families for homes, the devil is in the definitions and implementation. It gives the Treasury Department 30 days to define what qualifies as a “large institutional investor,” and until those guidelines are clear, there’s a lot of room for interpretation. For now, the order primarily restricts federal agencies from selling or facilitating the sale of government-held single-family homes to large investors that could be purchased by owner-occupants instead. That’s a relatively narrow slice of the market.Big players, hedge funds and REITs with thousands of homes under management, are the clear targets here, especially those scooping up distressed or foreclosed homes in bulk from government sources. But most of the private acquisitions of single-family homes by large investors aren’t coming directly from the government anymore. Much of that happened in the post-2008 era. These days, institutional investors are buying on the open market like everyone else, often competing with families, but also paying retail. The executive order doesn’t restrict that. It also includes exceptions for build-to-rent communities, which have been a major area of growth for institutional capital and are excluded as long as they’re dev...
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