Trump’s threat to ban Wall Street’s investments in single-family housing jolts markets, hits homebuilder stocks

Core Viewpoint - The U.S. President announced a move to ban Wall Street firms from purchasing single-family homes to reduce home prices, responding to rising living costs ahead of the midterm elections [1][11]. Group 1: Political Context - The proposed ban represents a significant shift for Republicans, aligning them with long-standing Democratic criticisms of corporate homebuying, which has been blamed for increasing housing costs and reducing supply [2][11]. - The announcement comes amid mounting political pressure on the White House regarding the cost of living [1][11]. Group 2: Market Reaction - Following the announcement, American Homes 4 Rent fell to a near three-year low, closing 4% lower, while Blackstone dropped about 5.6%, and the PHLX housing index decreased by 2.6% [5][11][12]. Group 3: Institutional Investors - A 2024 Government Accountability Office study indicated that institutional investors, including Blackstone, owned approximately 450,000 homes, or about 3% of all single-family rental homes in the U.S. by June 2022 [2][11]. - Blackstone stated that its exposure to single-family homes is minimal and that it has been a net seller of such properties over the past decade [6][12]. Group 4: Housing Market Trends - Since Trump's first election victory, U.S. home prices have increased by roughly 75%, significantly outpacing overall consumer inflation [8][12]. - However, home price growth has slowed, with a reported increase of only 1.7% in October, marking the weakest pace in over 13 years [8][12]. - Shelter-cost inflation has also decreased, with annual shelter inflation slowing to 3.0% in November, the lowest level in more than four years [9][12]. Group 5: Affordability Issues - Despite signs of cooling housing inflation, affordability remains a critical political issue, as many Americans continue to face high prices and limited inventory [10][12].