The Trump administration's declared war on real estate investment trusts (REITs) has taken a decisive step. What began as an executive order in January 2016 to prevent large institutional investors from buying single-family homes has now become a far-reaching legislative proposal: the U.S. Senate is debating new regulations that would require large institutional investors to sell their newly built single-family rental homes to individual buyers within a maximum of seven years.
The provision has been incorporated into the so-called 21st Century ROAD to Housing Act, a bipartisan bill that combines elements of the House's Housing for the 21st Century Act and the Senate's Renewing Opportunity in the American Dream (ROAD) to Housing Act. The text includes significant changes: it allows exceptions for large funds that build new homes for the rental market, but requires them to sell these homes to an individual owner after seven years.
The context in which this measure is framed is not insignificant. Since the 2008 financial crisis, institutional investors like Blackstone have acquired tens of thousands of single-family homes, a trend that has drawn criticism from housing advocacy groups and lawmakers, who argue that this phenomenon has reduced the supply available to individual buyers and driven up rents. The national median price of an existing single-family home reached $426,800 in the third quarter of 2025.
Trump had justified his offensive with a phrase that surprised many with its populist tone: "People live in homes, not corporations." The executive order instructs federal agencies to allow individuals and non-institutional investors to purchase foreclosed properties before investors.
However, the seven-year requirement has sparked a strong backlash from the industry. The National Association of Home Builders and the National Multifamily Housing Council sent letters to the White House and lawmakers opposing the seven-year requirement. Their argument: investors typically finance rental housing developments with the intention of holding them long-term, so forcing sales after seven years could make it difficult to secure financing for new projects.
Harsher critics go even further. According to the American Enterprise Institute, real estate commissions and sales preparation costs would amount to about 10% of the sale price, adding approximately $400 per month to the rent over the seven-year period. Ultimately, the tenants themselves would bear the brunt of the burden.
The debate is on. The US is venturing into uncharted political territory where the Trumpian right and sectors of the left agree on the diagnosis—the housing market is captured by financial capital—but where the solutions generate as much enthusiasm as misgivings. In the short term, nothing changes, as there are no clear laws on how the ban would be implemented. What is clear is that the American dream of homeownership is once again at the heart of the political debate.
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