Will Targeting Wall Street Improve Affordability for First-Time Buyers?

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On January 20, 2026, the President issued EO 14376, Stopping Wall Street From Competing With Main Street Homebuyers, aimed at reducing competition between first-time home buyers and large institutional investors in the single-family housing markets. The order’s premise is that large investors can outbid households and reduce the stock of homes available to owner-occupants. The question for policy evaluation is not whether investor activity exists, but whether the EO is likely to produce material affordability improvements for first-time homebuyers. While the order may produce localized effects in markets where institutional investor activity is concentrated, available evidence suggests it is unlikely to significantly alter national housing affordability conditions. This market intervention, moreover, could lead to unintended consequences in the rental markets.

What the EO Does (and Does Not Do)

EO 14376 directs federal agencies to use statutory authority to limit the role of federally-supported housing finance programs in facilitating certain acquisitions of single-family homes by large institutional investors. Rather than imposing an outright ban or mandating divestiture of existing holdings, the order instructs agencies to review whether federal programs[1] are being used in transactions involving the purchase of single-family homes by large institutional investors. Agencies are directed to identify ways these programs could be restricted where the transactions involve homes that could otherwise be purchased by families intending to occupy them as their primary residence, such as promoting sales of homes to individual buyers before investors using first-look policies. It also calls for increased ownership transparency in federally-assisted housing programs and directs the Department of Justice (DOJ) and the Federal Trade Commission (FTC) to prioritize antitrust enforcement related to potentially anticompetitive conduct in local single-family rental markets.

Because an EO is constrained by statutory authority, the order does not directly regulate private transactions conducted outside federal programs, nor does it alter mortgage underwriting standards, interest rate policy, zoning regulations, or other structural factors that influence housing supply. Its effectiveness will depend on how agencies define “large institutional investor,” how broadly they interpret their existing programmatic authority, and the extent to which investor activity relies on federal financing, insurance, or asset disposition channels.

The Housing-Market for First-Time Buyers

Recent market indicators point to substantial headwinds for first-time buyers. The National Association of Realtors reported that first-time buyers fell to 21% of homebuyers, a record low, and the median age of first-time buyers rose to 40 from 38 the year before and roughly 33 five years earlier in 2020. They also report a 10% median down payment for first-time buyers (the highest level recorded since 1989) and identify personal savings as the leading down-payment source. These trends suggest that households are taking longer to enter homeownership and facing higher upfront financial barriers.

On the financing side, Freddie Mac’s Primary Mortgage Market Survey illustrates how dramatically borrowing conditions have shifted. During the period from 2010–2019, 30-year fixed mortgage rates[2] ranged from 3.31% to 5.21%, with a decade average of approximately 4.09%. In contrast, during the 2020s (2020–present), rates have ranged from a historic low of 2.65% to a peak of 7.79%, with an average of approximately 5.27%. As of February 26, 2026, the 30-year fixed rate stood at 5.98%, down from 6.76% one year earlier but still nearly two percentage points above the 2010s average.

Data from Federal Home Loan Mortgage Corporation’s (Freddie Mac) First-Time Homebuyer Activity analysis shows that first-time buyers continue to represent a significant share of mortgage purchase activity, accounting for roughly 53% of purchase loans funded by Freddie Mac in the most recent quarter, increasing from its steady 45% from 2018 through 2022. This elevated share reflects both persistent demand from first-time buyers and reduced activity among repeat buyers, who face financing incentives to remain in their current homes due to higher interest rates (“rate lock-in effect”).

On the supply side, U.S. Census Bureau data provide observable indicators consistent with undersupply. The Housing Vacancies and Homeownership Survey shows homeowner vacancy rates at 1.2% and rental vacancy rates at 7.2%, levels that are low compared to the highs seen towards the end of the great recession[3], indicating tight market conditions. Quarterly Census estimates also show that the number of vacant homes available for sale has declined substantially over the past decade. Averaging these quarterly data estimates of homes available for sale shows that inventory averaged roughly 1.5 million units in the 2010s (2010-2019) fell to slightly over half with an average of 806,000 in the 2020s (2020-2025). Although total housing units have continued to increase, reaching approximately 148 million units nationally in the last quarter of 2025, household growth and demographic demand have absorbed much of that expansion. These Census indicators of tight vacancy and limited resale inventory align with Freddie Mac’s estimate that the housing market remains undersupplied by roughly 3.7 million units, suggesting that the imbalance reflects a sustained structural shortfall rather than temporary cyclical conditions.

What the Evidence Suggests About Large Institutional Buyers

Measurement challenges complicate broad claims about institutional investor impacts on housing markets. A key difficulty is identifying investor ownership as properties are frequently held through limited liability companies (LLCs) and other layered ownership structures. Research has shown that institutional investors often manage portfolios through networks of corporate entities that can obscure the identity of ultimate owners in property records. For example, Shelton and Seymour (2024) document how several large corporate landlords operating in Atlanta, Georgia controlled more than 19,000 single-family homes through over 190 distinct corporate entities. A 2024 Government Accountability Office (GAO) report notes that there is no consistent definition of institutional investor across datasets and studies, and these opaque ownership structures make measuring investor activity difficult. These data limitations make it difficult to isolate the independent effects of large institutional investors from broader investor activity in housing markets[4], including purchases by smaller landlords, investment groups, and other non-owner-occupant buyers.

Evidence suggests that the scale of institutional ownership is relatively modest at the national level but highly concentrated in certain markets. GAO reports that investors owning more than 1,000 single-family rental homes held roughly 3% of the national single-family rental housing stocks as of 2022. However, institutional ownership is significantly higher in specific metropolitan areas; estimates indicate that they account for approximately 25% of single-family rental housing in Atlanta, 21% in Jacksonville, and 18% in Charlotte.[5] This reflects the tendency of large investors to concentrate acquisitions in particular markets where economies of scale in property management are achievable.

The report also cites extensive empirical literature that finds that the effects of investor activity vary across local housing markets. At the Federal Reserve Bank (Fed) of Philadelphia, Lambie-Hanson, Li, and Slonksoky (2019) found that institutional investor purchases were associated with quicker home price appreciation in areas where acquisitions were concentrated during the housing recovery following the 2007-2009 financial crisis. Other research highlights that the relationship between investor activity, home prices, and rent depends on housing supply conditions. Garriga, Gete, and Tsouderou (2020) from the St. Louis Fed found that investor purchases can raise both home prices and rents with relative effects being conditional on housing supply elasticity.[6] In markets where housing supply is constrained, investor demand tends to raise home prices more, while in markets with more elastic housing supply investor demand is more likely to raise rental prices.

Where the EO May Help

The strongest case for measurable effects is in markets where institutional investor activity is geographically concentrated. As discussed above, empirical research finds that these investors have modest participation at the national level but can represent a substantial share of single-family rental housing in certain metropolitan areas.[7] In these localized markets, reducing large institutional investor participation could increase the probability that some entry-level homes fall to owner-occupants. Because prior evidence suggests price and rent effects are more visible in markets that are investor concentrated, any affordability gains from the EO are most plausible in these specific geographies rather than at the national level.

The order’s disclosure and enforcement provisions could produce administrative benefits independent of price effects. Layered LLC structures and fragmented ownership networks can obscure the true scale of institutional investor holdings in housing markets, making it difficult for researchers and policymakers to measure investor activity using standard property records. By directing the U.S. Department of Housing and Urban Development (HUD) to enhance ownership transparency within federally-assisted housing programs, the EO may improve visibility into ownership concentration and investor activity. Greater transparency could strengthen oversight and improve the quality of data available, even if the order’s direct effects on housing prices or homeownership remain modest. Similarly, the EO’s instruction that the DOJ and FTC prioritize review of competitive conditions in local rental markets, may increase scrutiny of investor behavior in areas where ownership is highly concentrated.

Where the EO May Fall Short

Many of the affordability challenges first-time homebuyers face are much broader than the segment of the housing market targeted by the EO. As noted earlier, the national housing market continues to face a substantial supply shortfall, with mortgage borrowing costs remaining elevated relative to much of the past decade, and first-time buyer participation falling to historically low levels. These factors influence housing affordability across the entire market. Against this backdrop, the EO has limited ability to shift national affordability outcomes, particularly where supply constraints and financing costs are binding.

There is also the possibility that the EO may cause investor activity to shift rather than decline. Large institutional investors represent only one segment of the broader investor landscape, which also includes smaller landlords, local investment groups, and individual buyers purchasing homes through corporate entities. Data from the Census Bureau’s Rental Housing Finance Survey show that individual investors own the majority of single-family rental properties in the US, highlighting that large institutional investors represent only one segment of the broader investor landscape.[8] If the regulatory constraints apply only to large institutional firms, investment could shift toward smaller or differently structured investors that fall outside of the scope of the policy. The definitional ambiguities and layered ownership arrangements discussed earlier may make distinguishing between covered and non-covered entities complex. As a result, reductions in one category of investor participation may not fully translate into reductions in overall investor demand or increases in owner-occupied housing.

Finally, changes in institutional investor participation could lead to unintended consequences for local rental markets. In some metropolitan areas where institutional investors hold a substantial share of single-family rental homes, reduced investor participation could shift properties from the rental market toward owner-occupancy. While this gives more purchasing opportunities, it could also reduce the supply of rental housing in neighborhoods where vacancy rates are already tight. In markets where households rely on single-family rentals as an alternative to homeownership, a reduction in rental supply could push prices up on rent. The net effect therefore depends on how changes in investor participation interact with local rental demand and supply conditions.

Recent Developments

Two subsequent EO’s issued on March 18, 2026 address some of the broader constraints discussed above. EO 14393 seeks to expand access to mortgage credit by encouraging changes to underwriting, appraisal, and lending practices that may reduce borrowing frictions. EO 14394 focuses on reducing federal regulatory barriers to housing construction by directing agencies to streamline permitting and environmental review processes, with the goal of increasing housing supply. Together, these measures target the financing constraints and structural supply identified in this analysis. However, their effectiveness will depend on implementation at the federal, state, and local levels, and they do not alter the more targeted scope of EO 14376, which remains focused on limiting institutional investor participation in specific segments of the housing market.