The reality is more complicated than it seems.

Will banning institutional buyers from buying homes fix the housing market?

The president recently proposed this idea, suggesting it could make housing more affordable. While it sounds like a simple solution, the reality is far more complicated, and it’s unlikely to have a major impact.

Let’s take a look at enforcement and potential consequences, starting with who would be affected by this proposal.

Who counts as an “institutional buyer”? Large companies are easy to identify, but many smaller investors also buy several homes through LLCs, which technically makes them companies too.

If the ban included these smaller investors, it could create a serious shortage of rental homes. On the other hand, if the law targets only the biggest companies, it would be difficult to enforce effectively.

Loopholes and enforcement challenges. Even if the law focuses only on large investors, enforcing it is not easy. Companies could split into smaller entities to get around the rules. Other questions remain:

• Can they still buy land and build new rental homes?

• Can they purchase apartment buildings?

• How would authorities enforce the law, and what penalties would apply?

Implementing this plan would require significant time, money, and legal effort.

“Institutional buyers purchased only 82 homes in 2025, amounting to only 0.1% of sales.”

Institutional buyers are buying very few homes today. In Maricopa County, for example, they purchased only 82 homes in 2025, which is just 0.1% of all sales.

That is a massive drop from 2021, when they bought over 8,500 homes and made up 10% of monthly sales at the peak. With numbers this low today, banning institutional buyers would likely have minimal impact on the housing market.

The only move that could really change the market. For housing prices to be significantly affected, institutional buyers would need to sell the homes they already own. However, this is a much more complicated process, with its own legal and logistical challenges.

What this means for buyers and sellers. The plan to ban institutional buyers has good intentions and support from both parties. But it would be costly, complicated, and likely change very little in today’s market.

The best approach for buyers and sellers is to stay informed and work with local experts. Knowing the facts behind the headlines will help you make smarter decisions.

If you need guidance or want someone to walk you through what this means for you, reach out to 480-267-9368, email Office@GoodCompanyRE.com, or visit goodcompanyre.com. We’re happy to help every step of the way.