Trump Targets Wall Street Homebuyers: Why BlackRock, Blackstone Are Feeling The Heat

Wall Street's biggest real estate investors suffered a heavy slump on Wednesday after President Donald Trump vowed to crack down on large institutional buyers of single-family homes.

Shares of Blackstone Inc. (NYSE:BX), one of the largest owners of U.S. residential and commercial real estate, slid 5.6% on Wednesday, marking their worst session since April.

The selloff quickly spread across the alternative asset management space. Apollo Global Management Inc. (NYSE:APO) fell 5.5%, KKR & Co. Inc. (NYSE:KKR) dropped 3.7%, and Ares Management Corp. (NYSE:ARES) declined about 3%. BlackRock Inc. (NYSE:BLK) – the world’s biggest asset manager – slumped 3.3%.

The market reaction followed a social media statement from Trump framing homeownership as the cornerstone of the American Dream—one he indicates has become increasingly out of reach.

Citing years of high inflation and rising housing costs, Trump said he would move to ban large institutional investors from buying additional single-family homes and would urge Congress to codify the policy.

"People live in homes, not corporations," he said, adding that further housing and affordability proposals would be outlined in an upcoming speech in Davos.

Are Big Investors Really Driving Prices Higher?

Data suggest institutional buyers play a role in housing demand, but are not the dominant force. Investor purchases accounted for roughly 27% of U.S. home transactions at their peak, according to estimates cited by The Kobeissi Letter.

Large and "mega" investors represent about 20% of that investor activity, translating to roughly 2% to 3% of total home purchases. That share reached about 4.8% during the pandemic, when borrowing costs collapsed.

"These purchases are already complete and cannot be ‘undone,'" according to The Kobeissi Letter.

"In our view, this will have less of an effect on home prices than most expect," the report said.

U.S. housing demand is already near a 40-year low, with home sales representing just 4.7% of occupied homes, according to Reventure data.

Even eliminating all investor purchases would still leave individuals accounting for more than 70% of the current demand. The bigger issue, analysts say, is supply.

High interest rates have effectively frozen the resale market. Existing homeowners hold mortgages averaging about 4.2%, roughly 200 basis points below today's 30-year fixed rate near 6.2%. That gap—the widest on record—creates a powerful incentive not to sell.

Why give up a 3% mortgage only to buy a new home at double the rate?

For the first time since 2005, existing homes are now selling for more than newly built ones, underscoring how constrained resale supply has become. Roughly 80% of U.S. borrowers have mortgage rates below 6%, and nearly three-quarters are locked in under 5%.

In that sense, the most valuable asset tied to many homes today isn't the property itself—but the ultra-low mortgage attached to it.

The solution, according to the report, is lower rates and more supply, not fewer buyers.

Photo: bilanol/shutterstock