Major investors are exiting the for-sale housing market, even before Trump’s ban

Legislation barring institutional investors from buying single-family homes for rent is making its way through Congress, but many are already selling thousands of homes — and have been for two years.

Research from housing data and analytics firm Parcl Labs shows that the largest investors are now net sellers of homes.

In every major urban housing market, investors make up a larger share of for-sale listings than the total housing stock. And in some cities, like Dallas, Philadelphia and Houston, they are selling more aggressively. Dallas investors own 9.2% of home equity but account for 22.8% of new listings for sale.

FirstKey Homes appears to be the most motivated, with more than double the listings of its peers, according to Parcl. They also offer much deeper price cuts, averaging 10% off original list prices, and lower prices approximately every 20 days.

“It’s a volatile housing market, and people are trying to avoid risk,” said Jason Leoris, co-founder of Parcl Labs. He pointed out that rents do not hold up compared to what investors could get if they sold.

“So it’s better to get that cash and see how it goes,” he said.

In its latest quarterly earnings release for the fourth quarter of 2025, Da’wah housesone of the largest publicly traded landlord companies, said that all of its 368 wholly-owned acquisitions were newly built homes purchased from multiple homebuilders. It reported 315 existing homes sold.

For all of 2025, Invitation reported that “all” of its 2,410 wholly owned acquisitions were purchased through homebuilding relationships, while 1,356 wholly owned homes were sold, “often to families buying for their own use.”

In an effort to make housing more affordable, President Donald Trump in late January signed an executive order aimed at preventing large institutional investors from purchasing single-family homes for rental use. It has placed an exemption on the purchase of new buildings built specifically for rentals.

The White House later sent proposed legislation to Congress, saying investors who own more than 100 single-family homes would be barred from buying more, but would not have to sell what they have. The Senate and House bills have different thresholds for the size of what constitutes a large investor, but they are not far apart.

To put this into perspective, single-family rentals make up roughly 10% of the housing stock in the United States, and the vast majority, 80%, are owned by so-called “mom-and-pop operators,” with fewer than 10 homes each, according to an analysis by Bank of America. Small investors, who own between 10 and 1,000 homes, constitute 17% of real estate owners. Large institutional investors who own more than 1,000 homes make up only 3% of the single-family rental market.

But the numbers are declining.

Initially, investors flooded the market after the subprime mortgage collapse that led to the Great Recession. Home prices in some markets have fallen by half, and foreclosures have skyrocketed. Investors bought homes at bargain prices and turned them into profitable rentals.

As markets recovered, there were fewer homes for sale to occupiers, because investors focused on this sector. In some cities, such as Atlanta, regular buyers couldn’t compete with investors, who usually came with cash. Some neighborhoods are almost entirely owned by investors.

But by 2022, even before Trump took office for a second time, investors were already pulling back and buying fewer homes, according to Barkle. Selling accelerated in late 2024, with Atlanta investors now selling nearly two properties for every one they buy.

Investors are now moving towards building to rent.

Most of the shift in net selling over the past few years has been a natural process of recycling capital, according to Rick Palacios, research director at research and consulting firm John Burns.

“Home prices rose after 2020, and many single-family rental investors sold assets as home prices rose, and then redeployed capital into high-yield build-to-rent versus buy-to-resale at those very high prices and high borrowing costs for investors as well,” Palacios said.

Builders also adjust their prices in real time, while resale sellers do not, he noted.

He added that this provided opportunities for investors to buy at discounts from construction companies.

Invitation Homes had been buying homes from builders like Lennar, but announced last January that it had acquired Atlanta-based ResiBuilt Homes, a build-for-rent developer in high-growth markets throughout the Southeast. ResiBuilt has been delivering about 1,000 homes a year, but Invitation Homes expects to expand that.

“One of the most constructive ways we can help is by adding more homes to the markets we serve,” Dallas Tanner, CEO of Invitation Homes, said on an earnings call last month with analysts. “While our homebuilding partnerships have supported this effort for years, our acquisition of ResiBuilt further expands this effort and improves our control over cost, product quality and pace of delivery.”

AMHformerly known as American Homes 4 Rent, meanwhile, has been building entire rental communities itself for several years. In its latest fourth-quarter earnings release, CEO Brian Smith said: “Since the start of our comprehensive development program, we have contributed more than 14,000 newly built homes to the nation’s housing stock. Our 2025 results and our 2026 outlook reflect a continued focus on expanding the nation’s housing supply, elevating the resident experience, and creating value for all of our stakeholders.”