In early 2026, the White House took aim at one of the most important issues in the U.S. economy: housing affordability. With home prices still elevated and mortgage payments significantly higher than in the pandemic era, the administration unveiled a set of housing policy proposals designed to make homeownership more accessible to ordinary Americans.
The two proposals are:
- Ban large institutional investors from purchasing single-family homes; and
- Directives for government-backed entities like Fannie Mae and Freddie Mac to purchase hundreds of billions of dollars in mortgage-backed securities (MBS) to drive down mortgage interest rates.
Targeting Wall Street
An executive order was signed that intended to curb the ability of “large institutional investors” to buy single-family homes that could otherwise be purchased by families. The White House framed this as an effort to “put families first” by preserving inventory for owner-occupants and expanding opportunities for first-time buyers.
The order directs federal agencies to issue new guidance within 60 days aimed at restricting how government programs and government-sponsored enterprises (GSEs) might assist large institutional investors in acquiring single-family homes. The executive order directs the Treasury Secretary to define key terms, especially what qualifies as a “large institutional investor” and a “single-family home”, a technical detail that will determine the reach of the policy.
Why this matters (and why it might not)
The administration argues that large institutional buyers have contributed to affordability problems by outbidding families for starter homes. In political messaging, such purchases are often portrayed as Wall Street crowding out Main Street.
But the data suggests this issue may be smaller than the rhetoric implies. Large investors, defined in some analyses as entities owning 100 or more single-family homes, own only a small share of the overall market. Estimates suggest such investors account for roughly 1% of the total U.S. single-family housing stock nationally, and acquisitions by institutional investors make up less than 2% of home purchases.
Most investor purchases of single-family homes are made by small landlords, not large Wall Street firms. And in many markets, individual owner-occupants still overwhelmingly dominate transactions. Experts argue that targeting large investors may have limited impact on supply or affordability, as the underlying constraint continues to be a lack of homes available overall, not just who owns them.
Economists have also noted that institutional investors can play a stabilizing role by providing liquidity and rental options, especially in markets where supply is tight.
Because the executive order itself does not yet specify definitions or enforcement mechanisms, much remains uncertain about how the policy would play out in practice and whether it will require Congressional approval to be effective.
Mortgage-Backed Securities Purchases
Alongside curbing investor influence, the administration has directed Fannie Mae and Freddie Mac to $200 billion worth of mortgage-backed securities (MBS) with the goal of lowering mortgage interest rates and making home loans cheaper.
Traditionally, when Fannie and Freddie buy MBS or hold large portfolios of mortgage bonds, they increase demand for these assets in the secondary market. That additional demand tends to put downward pressure on yields, which can translate into lower mortgage rates for borrowers.
Even a modest drop in rates may simply reignite demand and put renewed upward pressure on prices, rather than bringing relief to buyers. For now, affordability remains a tale of two Americas: coastal and Sun Belt metros where middle-income buyers are locked out, and Midwest markets where steady prices still allow for sustainable ownership. Unless wage growth begins to catch up or construction meaningfully expands, the gap between home prices and household incomes is likely to persist well into 2026.
What this could mean
Lower mortgage rates can boost affordability by reducing monthly payments and expanding the pool of qualified buyers. During the pandemic, Federal Reserve purchases of large quantities of MBS helped push mortgage rates down to historic lows near 3%.
However, the effects may be modest relative to the scale of the overall market. Simply buying mortgage bonds does not directly increase housing supply, and mortgage rates also depend on broader financial conditions, including inflation expectations and Treasury yields.
There are also concerns that a dramatic expansion of GSE portfolios could increase financial risk for Fannie and Freddie, which are government-sponsored but privately held entities. Expanding holdings beyond conventional limits established after the 2008 financial crisis could expose them to market volatility and credit risk.
The Bottom Line: Bold Rhetoric, Mixed Impact
The administration’s housing policy initiatives reflect a renewed federal focus on an issue that affects millions of Americans. By prioritizing individual homeowners over large investors and pushing for lower borrowing costs, the administration seeks to ease some of the pressures that have made homebuying difficult in recent years.
Yet the practical impact of these policies is unclear. Restricting large investor purchases might signal a shift in priorities, but the actual share of the market controlled by such investors is small, suggesting limited market-wide effects. Government-backed mortgage bond purchases could nudge rates lower, but broader economic forces such as inflation and global financial conditions, play a significant role in determining mortgage costs. Neither policy directly addresses the core supply shortage, that is the root cause of persistent affordability issues. In other words, these housing agenda are unlikely to fundamentally alter national affordability dynamics without complementary measures that expand housing supply.
About Reena Agrawal, Senior Research Economist
Reena Agrawal received her PhD in Economics from Vanderbilt University and MA in Economics from The Ohio State University and has several years of industrial experience in economic research and analysis.
