President Donald Trump’s push to ban large institutional investors from buying single-family homes received a legislative boost this week when a provision addressing that White House priority was included in a new version of a massive bipartisan Senate housing bill.
The Senate package, first introduced last July and rebranded Monday in revised form as the 21st Century ROAD to Housing Act, now contains a section that “prohibits large institutional investors from purchasing certain single-family homes to promote homeownership opportunities for American families, not corporations,” according to a summary from the Senate Committee on Banking, Housing, and Urban Affairs.
But a Redfin analysis released Wednesday suggests that single-family investor activity has been sluggish over the past two years, which appears to undercut the purported benefits of an institutional investor ban.
Residential real estate investment trudged forward in the fourth quarter, according to the Redfin report, rising just 2% year over year and marking the eighth straight quarter of minimal investor gains.
The data reveals a fragmented landscape for U.S. home investors, with West Coast metros like Seattle, Portland and San Francisco experiencing a surge in investment dollars, while several Florida metros lagged considerably.
“Some investors are keeping their pocketbooks closed, which eliminates competition for everyday first-time buyers,” noted Chen Zhao, Redfin’s head of economics research, commenting on the broader national trend.
Among 38 major U.S. metros analyzed by Redfin, investors scooped up 49,824 homes during the fourth quarter. That represents an 18% share of all home purchases in those areas, roughly flat from the previous year.
Seattle led all metropolitan areas with a 37% annual jump during the quarter. Redfin attributed enhanced investor interest in the Emerald City to exorbitant housing costs pricing out typical residents — which in turn spiked rental demand and increased value propositions for landlords.
At the bottom of the list, Orlando, Fla., posted a 16% decline in investor purchases. Several factors contributed to that downturn, including sagging rental prices; a challenging climate for home flippers amid rising inventory and cooling home prices; and soaring insurance costs, which cut into investor profits.
An outlier to the Sunshine State trend was seen in West Palm Beach, where luxury home sales drove a 17% annual gain in fourth-quarter investor purchases. That’s part of a broader pattern in the luxury home market, Redfin observed, which saw a 5% year-over-year increase in overall investor purchases during the quarter.
By property type, investors bought 3% more single-family homes during the fourth quarter compared to the prior year, 2% more multifamily properties and 1% more condominiums. But they largely shunned townhouses, with investor purchases dipping 8%.
Another notable stat cited by Redfin is that 9.2% of homes sold by investors in December didn’t turn a profit, up from 7.1% the previous year, a deterrent sidelining some investors from making subsequent purchases.
Uncertainty over proposed single-family investor ban
Investment activity in the single-family market has received significant scrutiny in 2026. On Jan. 20, Trump issued an executive order that formalized his Jan. 7 social media post aiming to curb single-family home purchases by large institutional investors.
“To preserve the supply of single-family homes for American families and increase the paths to homeownership, it is the policy of my Administration that large institutional investors should not buy single-family homes that could otherwise be purchased by families,” Trump’s order stated.
The order tasked Treasury Secretary Scott Bessent, in consultation with White House economic advisers, with formulating definitions of the terms “large institutional investor” and “single-family home” for the purpose of implementing the order.
Despite a 30-day deadline, no official definitions have been released by the administration. The Treasury Department did not respond to a Scotsman Guide request for a status update.
But according to reporting by The Wall Street Journal, the White House sent a memo to House and Senate committee leaders on Feb. 19 outlining a proposal to ban investors with more than 100 single-family homes from purchasing additional homes. The proposal included various exemptions, according to the Journal, “including for investors who build or heavily renovate homes for the sole purpose of renting them out.”
The terms in question did receive formal definitions in the revised 21st Century ROAD to Housing Act released Monday by Sen. Tim Scott, R-S.C., and Sen. Elizabeth Warren, D-Mass.
In a section of the bill titled “Homes Are for People, Not Corporations,” a single-family home is defined as “a structure that contains 2 or fewer dwelling units that are each intended for residential occupancy by a single household,” excluding manufactured homes as defined under Section 603 of the National Manufactured Housing Construction and Safety Standards Act of 1974.
“Large institutional investor,” meanwhile, is defined as an entity that “directly or indirectly has investment control of not less than 350 single-family homes in the aggregate,” with certain exemptions.
Scott told reporters Tuesday that the inclusion of the investor ban in the bill was a condition for the legislation to receive White House backing, according to Bloomberg.
A previous analysis from Zhao, the Redfin economist, expressed doubt that a ban on institutional investors from purchasing single-family homes would have much impact on improving housing affordability “because large investors own a very small share of single-family homes in the U.S.”
“A policy move like that can sound good on paper because narrowing the homebuying pool to include only people seeking to live in the home themselves could help with affordability because it would limit competition,” Zhao wrote on Jan. 21. “But there are drawbacks to the proposal, and other solutions — like building more homes — would do more to improve homebuying affordability.”
Other experts who have spoken with Scotsman Guide about the proposed ban have also been skeptical about how much of a dent it would have on easing the housing affordability crisis.
Selma Hepp, chief economist at Cotality, wrote in a January email that “while a ban aims to increase volume from non-investor borrowers, the ‘cost to originate’ for a first-time buyer is significantly higher than for a corporate entity, and a surge in volume may not materialize if interest rates remain high.”
She added that markets with high concentrations of home investors could experience a “liquidity shock,” potentially eroding equity for existing homeowners and creating “a vacuum that only cash-rich individual buyers (or small investors) — not the average first-time homebuyer — can fill.”
