Whitney: Housing May be Trump's Shortest 'Trial Balloon'

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00:00We've discussed on the show with you before that housing affordability, that is going to be one of

00:04the big topics in the 2026 midterm elections. And with that in mind, we'd love to hear your

00:10reaction to this post by President Donald Trump looking at maybe banning those institutional

00:15investors from buying single family homes. Well, I think what everyone has to remember is that

00:21this isn't the first idea that the White House has floated. Originally, they floated the 50 year

00:27mortgage or turning federal land over to new affordable housing development space. So this,

00:36I think, is one of the one of those trial balloons they're floating. This one, interestingly,

00:42though, hits the jugular of Blackstone, as you said. However, everyone also has to remember that

00:49one of Trump's bigger donors and advisors is Steve Schwartzman, one of the co-founders of Blackstone.

00:55So I think when he, when whoever put this tweet out, whether it was the president or someone doing

01:01it for the president, he quickly got a message, Mr. President, Steve Schwartzman's holding on line

01:08one. So I think that this may be the shortest floated trial balloon of the White House's trial

01:15balloon to try to rectify affordable housing. It is true. I think you're spot on that affordable housing

01:21will be one of the, if not the central themes of the midterm elections. So the House, sorry,

01:29the Senate in July passed a bipartisan bill addressing affordable housing. And just before

01:35the holiday break, the House passed unanimously a bipartisan bill to address affordable housing.

01:44So that will go to reconciliation. But the White House wants to have it say too. And I think it's

01:50trying to find what say it will be. Well, as Romain said, there's a lot of questions here about how

01:56this would even be implemented if it moves beyond this trial balloon stage. But President Trump's

02:01stated ambition here is to basically make housing more affordable, make it possible for younger people

02:07to actually afford to buy homes here. And just hypothetically speaking, if this were to go through,

02:12you think about the stats that investors of all sizes accounted for 30 percent of single home

02:17purchases, single family home purchases in the beginning of 2025, and that the larger institutional

02:23investors own about 2 percent of the nation's single family rental housing stock. If institutional

02:29investors weren't able to buy single family homes anymore, how far would that go to potentially

02:35addressing this affordability crisis? Well, the institutional market, if you're going to say that the total

02:41investment market is comprised 80 percent of mom and pop and then 20 percent of these institutions.

02:48So you take the institutional group out and they're really buying and you see the home builders

02:53weakness today, too. They're buying a lot of they're trying to buy homes in mass. So they're not buying

03:00individual existing homes on a one off basis. That doesn't get there too big. They're too big of scale for

03:06that to move the needle. They're buying excess inventory from the home builders. So the real

03:11problem in housing is not just rates, but also the fact that there's very little existing home

03:17inventory on the market market. And so people are staying in their homes longer and that keeps

03:24inventory tight. And so people are aging in place and that's not going to change. So what the House and

03:30Senate bill address is creating new homes, new building homes. And a lot of it is focused on

03:35manufactured housing. And that is a closer solution. When we talk about the solutions,

03:40though, is there sort of a sense here that maybe there should be some maybe some potential cap on

03:44some of the appreciation in rent prices? Because even when you look at the percentage of homes owned

03:48by institutional investors, still relatively small, as you just pointed out here. But when you look at the

03:54actual price increases on rental properties owned in those institutional portfolios relative to those

03:59that aren't, there's a huge disparity there. And I am curious if a rental cap, if at all, would even be

04:05something that could be considered? Well, I wouldn't address I can't address the rental market so much,

04:12but I can address the home buying market, which was the lowest in terms of volume in over 25 years

04:20in 2025. And 26 isn't looking that much better. And that is the real bugaboo in terms of people being

04:28able to afford a new, like a first time buyer, being able to afford a home, set aside the rental

04:34market. It's trying to get people to invest and be able to realize the American dream. And I just

04:41don't see that happening anytime soon with first of all, anytime soon. That doesn't mean that there

04:47won't be a lot of chin wagging closer to the midterm elections. And there are things that they can do.

04:52They're obviously longer term solutions that will get us closer to a solution. But I think that

04:58I don't feel as if this tweet today goes far at all.

05:04How much do you think this is actually contributed, meaning this investment practice has actually

05:09contributed to that increase in home prices? I know there's a correlation, but I feel like the

05:13causation is maybe a little bit less clear. And we've even seen some moderation in some of those

05:20increases in both home purchase prices as well as rental prices since the pandemic has sort of

05:26waned. Romain, you nailed it. I mean, it hasn't it hasn't moved the needle that much. The fact is

05:31that there has not been much inventory on the market. So regardless of who's buying the properties,

05:39a very tight labor market has kept prices high. And even if you lower rates, unless prices come down

05:46dramatically, you still have the same affordability challenge for new buyers or an existing buyers.

05:53It's just very expensive to get into a new home, be it a first time buyer or a multiple time buyer.

06:01And that's a product of the fact that home prices have gone up close to 50 percent since 2020.

06:07And so, Meredith, I mean, in your view, as you mentioned, there's been a lot of trial balloons floated.

06:11This is the most recent one. You bring up 50 year mortgages as well. When you think about where we

06:17stand, the core root of why we're having this affordability crisis. I mean, what in your view

06:21would actually solve some of these issues that we're talking about? I think you have a number of

06:27things that can happen at the legislative level, but so much has to happen at the local level.

06:33And what the White House can really champion is working with states through working with governors

06:38to sort of to press the local municipalities to fast track zoning, zoning advancements, making it easier

06:48to turn commercial lots into residential lots. And there's a fast tracking type of environmental

06:57approvals, fast tracking a number of approvals that all has 70 percent of real estate happens.

07:03At least 70 percent of the real estate happens at the local level. And the governors are the closest

07:08to that that can really make make a move. And of course, the White House and Washington controls a lot

07:15of the purse that goes to the state. So there's actually a lot of flexibility that the White House

07:19has that they haven't tapped into yet in terms of the latest trial balloon.

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