Bipartisan Bill Targets Wall Street’s Role in America’s Housing Crisis
A Rare Moment of Unity in a Divided Congress
In a political climate where Democrats and Republicans rarely see eye to eye, two senators from opposite sides of the aisle are joining forces to tackle one of America’s most pressing problems: the dream of homeownership slipping further out of reach for ordinary families. Republican Senator Josh Hawley from Missouri and Democratic Senator Jeff Merkley from Oregon are introducing groundbreaking legislation that would essentially tell Wall Street to keep its hands off single-family homes. Their timing is particularly notable, coming just two days after President Trump used his State of the Union address to call out institutional investors for making it nearly impossible for regular Americans to buy homes. This bipartisan effort represents the first major legislative response to the President’s call to action, though it’s worth noting that Senator Merkley and other Democrats had already been working on similar proposals even before Trump’s speech brought the issue into the national spotlight.
What the New Bill Would Actually Do
The proposed legislation, carrying the straightforward name “Homes for American Families Act,” takes a surprisingly direct approach to a complex problem. Rather than creating new regulatory frameworks or establishing complicated oversight mechanisms, it would simply update the historic Sherman Antitrust Act of 1890—a law originally designed to prevent monopolies and protect competition—to include a prohibition on large investment funds purchasing single-family homes. The key threshold is $150 million in assets: any investment fund larger than that would be barred from buying single-family homes, condominiums, or townhouses. Importantly, the bill includes an exception for homebuilders who are actually constructing new units to sell, recognizing that those companies serve a different function in the housing market. Enforcement would fall to the Justice Department’s antitrust division, the same office that already handles cases involving anticompetitive business practices. This means the government would have the power to take legal action against investment firms that violate the ban, potentially levying significant penalties.
Why This Matters: The American Dream Under Siege
The senators behind this bill aren’t mincing words about what’s at stake. Senator Hawley framed the issue in terms that resonate with frustrated homebuyers across the country: “Families deserve to be able to buy their own homes and achieve the American dream without competing with big investment companies that irrevocably drive up housing prices.” His Oregon colleague Senator Merkley echoed these concerns, describing the situation as “corporate investors invading the housing market nationwide” and positioning the legislation as protection for “hardworking Americans achieving the dream of homeownership.” These aren’t just talking points—they reflect a growing anxiety among Americans that homeownership, long considered a cornerstone of middle-class life and financial security, is becoming a privilege reserved for the wealthy rather than an achievable goal for those willing to work hard and save. A recent CBS News poll found that a staggering 83% of Americans believe buying a house is harder now than it was for previous generations, a sentiment that crosses party lines and demographic groups.
The Cold, Hard Numbers Behind the Crisis
The statistics paint a sobering picture of just how difficult the housing market has become for ordinary buyers. According to Federal Reserve data, prospective homebuyers now need to earn 43% more than the median worker just to afford a typical home—a gap that has left millions of families on the sidelines, unable to compete in today’s market. While large institutional investors currently own about 3.8% of all single-family rental homes nationwide according to a 2023 Urban Institute analysis, that national average masks some truly alarming regional concentrations. In the Atlanta metropolitan area, for instance, these corporate landlords control more than 28% of single-family rental properties. In Charlotte, the figure is around 20%. These aren’t just numbers on a spreadsheet—they represent thousands of homes that might otherwise have been purchased by families looking to build equity, establish roots in a community, and achieve the stability that homeownership provides. President Trump highlighted the human cost of this trend in his State of the Union address when he introduced Raysall Wiggins, a mother of two who placed bids on 20 different homes only to be outbid every single time by well-funded investment firms paying cash and converting those properties to rentals.
The Root Causes: More Than Just Wall Street
While the senators pushing this legislation are focusing on the role of institutional investors, most housing experts agree that the affordability crisis has deeper, more structural causes. The fundamental problem, according to many economists and housing analysts, is that America simply doesn’t have enough homes. The construction of new housing collapsed ahead of the 2008 financial crisis when the housing bubble burst, and the homebuilding industry never fully recovered to its previous pace. Goldman Sachs estimated last year that the United States would need to build somewhere between three and four million new homes—beyond the normal rate of construction—just to address the existing shortage. That’s a staggering deficit that can’t be fixed quickly or easily. However, lawmakers from both parties have argued that even with this supply shortage, the presence of deep-pocketed institutional investors makes an already difficult situation significantly worse for individual buyers. When a family saving for years to afford a down payment goes up against an investment fund that can pay cash immediately, waive inspections, and close in days, it’s not a fair fight. The investment firms can afford to pay above asking price because they’re not thinking about whether they can afford monthly mortgage payments—they’re calculating long-term returns on portfolios worth billions of dollars.
What Comes Next: A Window of Opportunity?
The legislative landscape on this issue is developing rapidly. President Trump has already taken executive action, signing an order last month that directs federal agencies to avoid approving, guaranteeing, or facilitating the sale of most single-family homes to large institutional investors. His State of the Union call for Congress to make those restrictions permanent has created momentum that both parties are now trying to channel into concrete legislation. The Hawley-Merkley bill represents one approach, but it’s not the only game in town. Just this week, Senator Merkley teamed up with Senator Elizabeth Warren of Massachusetts to introduce a different bill that would attack the problem from a tax angle, preventing owners of 50 or more homes from claiming tax deductions for depreciation and mortgage interest on those properties. The existence of multiple bills with similar goals actually increases the chances that some form of restriction on institutional home buying will eventually become law, as lawmakers can negotiate and potentially combine the best elements of different approaches. The bipartisan nature of the Hawley-Merkley bill is particularly significant in today’s polarized political environment, suggesting that opposition to Wall Street’s expansion into single-family homes is one of the few issues that can unite left and right. Whether this unusual moment of agreement can translate into actual legislative success remains to be seen, but for millions of Americans priced out of homeownership, any meaningful action would be welcome news.
