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New York —

President Donald Trump, like any politician whose polling is in the gutter, is desperate for a villain — any villain — to blame for America’s affordability woes. Enter Wall Street.

Nearly a year into his second term, even Trump seems to understand that the Joe Biden blame game has grown stale. His other go-to bogeyman, Federal Reserve Chair Jerome Powell, is now firmly in his lame-duck era as his term ends this spring. There’s a midterm election in the fall, and Republican strategists have been begging Trump to make a case for his economic strategy and (for the love of God) stay on message.

This week, the president, who ran on affordability only to later call it a Democratic “hoax,” introduced two new, light-on-details pitches focused on the cost of housing — an issue at the core of America’s economic disillusionment — and all the ways the Wall Street fat cats have screwed over regular folks.

The problem is: Wall Street isn’t the problem.

On Wednesday, Trump said in a social media post that he would move to ban large institutional investors from buying more single-family homes, taking a page out of the progressive Democratic playbook. The next evening, he posted a cryptic declaration to have the government buy $200 billion in mortgage bonds in an attempt to drive down interest rates and monthly payments.

More details, he said, would be coming later this month.

By most accounts, though, Trump’s proposals aren’t addressing the biggest thing boosting home prices: the lack of supply. America needs about 4 million more homes to return housing to affordable levels, according to Goldman Sachs Research.

Banning big investors

“This is not going to move the needle as far as affordability goes,” Jake Krimmel, senior economist at Realtor.com, told me, referring to the proposed ban on Wall Street investors gobbling up single-family homes. “Although these large institutional landlords are certainly a villain in the headlines, they’re a red herring when it comes to the actual shortages and the affordability issues that we’ve been seeing in the US for the last decade-plus.”

By “institutional investors,” of course, Trump is referring to investment firms like the ones run by some of his billionaire allies, including Blackstone, which owns hundreds of thousands of apartment complexes, mobile home parks, and single-family houses across the United States.

Real estate has been a lucrative institutional investment since the collapse of the housing market in 2008. The finance industry swooped in to desirable neighborhoods to buy up suddenly cheap housing stock and started collecting rent on those properties. Estimates of the scale of those purchases vary, but a Brookings Institution study found that between 2012 and 2019, an estimated 240,000 single-family homes were owned by institutional investors. That made Wall Street a frequent target of Democrats, who argued the practice drove up prices and locked prospective first-time homebuyers out of a wealth-building opportunity.

But the large investors still amount to a tiny portion of the overall market.

Large institutional investors — those that own more than 1,000 properties — accounted for between 1% and 3% of the homes purchased in 2025, Krimmel says. That’s a relatively small slice of the pie, and it’s been shrinking in recent years as interest rates have gone up. The vast majority of real estate investment purchases come from so-called “mom-and-pop” landlords — people who own one or two additional homes that they rent out to supplement their income.

Of course, in some markets, particularly Sun Belt cities, institutional investors make up a much bigger share. A Government Accountability Office study in 2024 found large investors owned 25% of rentals in Atlanta; 18% in Charlotte, North Carolina; and 14% in Phoenix, for instance. But even if you stopped all institutional ownership, Krimmel says, it’s not likely to make a huge difference because inventory in those cities is already rising steadily, keeping prices in check.

The mortgage bond pitch

Trump’s other housing pitch would take a more technical, financial approach.

“I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS,” he wrote on Truth Social on Thursday. “This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable. “

Fannie Mae headquarters in Washington, DC. Andrew Harnik/Getty Images

Put simply, this plan would involve the federal government, through Fannie Mae and Freddie Mac, buying up a boatload of mortgage-backed securities — something the Fed has traditionally done in times of turmoil to keep interest rates from spiking. (Fannie and Freddie largely got out of the mortgage-bond investing business in 2008, when problems in the subprime market forced the government to take over the mortgage giants to avoid bankruptcy.)

Certainly, many economists have said, ramping up purchases of mortgage bonds would help bring mortgage rates down, offering some relief to homebuyers. But, once again, doing so does nothing to increase the housing supply.

And it probably won’t spur people to sell the homes they live in now and look for something else, known as the “lock-in effect.”

“At a high level I feel this is putting a Band-Aid on a deeper issue and it probably wouldn’t lower rates enough to really undo the mortgage rate lock-in effect,” Daryl Fairweather, chief economist at real estate brokerage Redfin, told the Associated Press.

Historically, though, mortgage rates around 6% are hardly unusual — it is the chronic shortage of supply that has pushed the median home price to about $410,000, up nearly 30% since 2020.

‘Really convoluted’

So, could Trump or Congress do something to move the needle on affordability?

Yes, Krimmel said, but it doesn’t quite have the same populist flair as “sticking it to Wall Street” does in a campaign speech or social media post.

“This is a really difficult, endemic problem. There’s a reason that not only has it not been solved, but it’s actually gotten worse over time, because it’s really convoluted,” he said. “What can the federal government do? They can create incentives for state and local governments to add supply, to meet the demand where it is. What does that look like in practice? It’s setting out standardization and guidelines for streamlining permitting or increasing zone capacity,” aka allowing housing to be built more densely.

Smart! Sensible! (And yes, far too wonky for a bumper sticker.)