Recently, there was a newly signed executive order aimed at restricting Wall Street and other large institutional investors from purchasing single-family homes in an effort to make housing more affordable and accessible for families. The order directs federal agencies to issue guidance and take steps that prioritize individual buyers over institutional buyers.

At first glance this may sound like a major shift. However, experts and market data suggest that it is unlikely to significantly change the housing picture in places like North County San Diego. Here’s why.

Corporate Homeownership Is Relatively Small

Although investor activity often makes headlines, large institutional investors own only a small percentage of single-family homes nationwide. Estimates vary, but many research sources show that firms owning hundreds or thousands of homes control roughly 1% to 3% of the national single-family housing stock. In contrast, individual “mom-and-pop” investors and small landlords with a handful of properties make up the vast majority of investor ownership.

In California, and locally in San Diego County, this pattern is similar. State research shows that homes owned by companies with 10 or more properties account for under 3% of the single-family stock. Even though investor purchases may seem visible at times, most housing remains in the hands of individual homeowners rather than corporate landlords.

Why This Executive Order Has Limited Impact

Because institutional investors hold a relatively small share of the market, especially compared to individual buyers and smaller landlords, curbing their purchases alone is unlikely to lower home prices or dramatically increase homeownership opportunities. Nearly 80% of single-family homes are still owned by individuals or small investors.

The key constraints on housing affordability are not only who buys homes but how many homes exist in the first place and who can afford the financing. Even if large investor purchases slow, limited housing supply, high construction costs, zoning constraints, and elevated mortgage rates will continue to exert upward pressure on prices.

Strategies That Can Actually Help

Instead of focusing mainly on restricting corporate buyers, housing experts generally point to the following strategies that could have a more meaningful impact on housing affordability and access:

1. Increase Housing Supply
   Building more homes is essential. Relaxing local zoning restrictions to allow more diverse housing types, such as townhomes, duplexes, and multi-family units, can expand supply and relieve competition for single-family homes.
2. Update Tax Policies Like Capital Gains Exclusions
   Reforming the capital gains tax exclusion on primary residences would encourage movement within the market and reduce barriers for sellers. This could help homeowners transition more readily and open up inventory for first-time buyers.
3. Expand Financial Assistance Programs
   Programs that support first-time buyers, such as down payment assistance or tax credits, can reduce the financial barriers that often prevent early homeownership, especially for younger or lower-income families.
4. Streamline Building Approval Processes
   Reducing the time and regulatory complexity required to approve new housing developments can speed up construction and lower costs.

Conclusion

The recent executive order targeting corporate buyers sends a political signal that housing affordability is a priority. However, because institutional investors represent only a small fraction of the homeownership market, especially in California and North County San Diego, the practical impact on affordability and access is likely to be modest. Meaningful change will require broader efforts to increase supply, adjust tax incentives, and improve financial access for everyday buyers.