President Donald Trump announced Wednesday he intends to stop large institutional investors from acquiring additional single-family homes. Whether it will have the intended effect remains to be seen, but it certainly lowered the stock prices of companies that invested heavily in single-family homes, as well as others in the housing business. For example, Invitation Homes , the nation’s largest single-family home owner, was the 9th worst-performing stock in the S & P 500 Wednesday, and private equity firm Blackstone (BX) , another firm that scooped up homes following the credit crisis as home prices and interest rates fell, was the 12th worst-performing stock. The White House proposal targets private equity firms, real estate investment trusts and other major investors, including Blackstone, Invitation Homes (INVH) , and Progress Residential (owned by Pretium Partners), who have built significant portfolios of single-family rentals since the 2008 financial crisis. These entities have capitalized on foreclosure opportunities and rising property values, especially in the Sun Belt. Regulatory efforts to curb profit opportunities for investors in residential real estate, whether through rent control or mandates that new construction include “affordable housing,” have a pretty poor track record of increasing housing stock and lowering costs because they tend to discourage new construction by making it uneconomic. The old saw “the best solution to high prices is high prices,” suggests that high prices spur new supply. Curbing supply amid persistent demand actually raises housing costs, as many cities with ill-fated rent-control policies have learned. Trump’s idea, in theory, is to reduce demand from institutional buyers and thus lower prices. However, it does little to solve the housing shortage, which wasn’t caused by institutional home ownership (they rent these houses out), but instead by higher building costs due to inflation over the past several years and higher interest rates, creating a disconnect between median incomes and median home prices. Whether or not Trump is successful in blackballing Blackstone from home buying, the company’s real estate assets under management, which they break into three segments, Core+, opportunistic and debt, shrank year over year between 2024 and 2025 as a percentage of total assets to 25.8% in 3Q25 from ~29.4% in 3Q24 (see chart below from the presentation that accompanied its most recent quarterly earnings release). Blackstone is an impressive asset-gathering machine whose biggest challenge before Trump’s announcement Wednesday was “realizations” — that is, when they actually exit an investment profitably, something that PE firms have seen slow as interest rates rose starting in 2022. Normally, a company trading at approximately 24x forward earnings, with 20%+ forecast revenue and earnings growth, would seem quite compelling, but not so much if the government takes away the punch bowl. It’s likely the stock remains range-bound as investors decide whether this latest threat has real teeth, which may make BX an interesting candidate for a strangle sale: selling a downside put and an upside call to collect some yield. For example, the February 140/170 strangle would collect about $4.35 per share, or about 2.8% of today’s closing price in about 6 weeks. The risk, of course, is that one would get long the stock at a nearly 12% discount or short the stock at a 13.5% premium. As it happens, Blackstone was range-bound at approximately those levels for the entirety of Q4 2025. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
