JUANA SUMMERS, HOST:
It's been hard to nail down President Trump's message on the high cost of housing. It wasn't too long ago that the president said he wanted to address it, but then last week, he said for existing homeowners, at least...
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PRESIDENT DONALD TRUMP: We're going to keep those prices up. We're not going to destroy the value of their homes so that somebody that didn't work very hard can buy a home.
SUMMERS: One thing Trump has done is sign an executive order aimed at large institutional investors who buy up homes. Nick Fountain from our Planet Money team has been looking into whether these Wall Street firms raise housing costs or lower them.
NICK FOUNTAIN, BYLINE: Yeah. The answer is yes. Let me explain, with the help of Caitlin Gorback, professor at UT Austin. Gorback started researching this in 2022. She says it wasn't easy compiling all the data because who exactly bought a home is often shrouded by cryptically named shell companies.
CAITLIN GORBACK: It's like code-breaking and investigative journalism.
FOUNTAIN: Yes. Let's make a movie about you guys.
GORBACK: Yeah. Who would play me? Not Nicholas Cage, but this does feel like his genre.
FOUNTAIN: Gorback found only something, like, 3% of single-family homes and townhomes in the U.S were owned by big investors as of 2022 - very small.
GORBACK: Quite small, yes.
FOUNTAIN: But she did find where they had bought those houses was concentrated, often in Sunbelt cities like Atlanta, Charlotte, Phoenix. So what did they do to housing costs in those areas? Well, she says it depends on when you're talking about. First, in the aftermath of the financial crisis, there was a period when big landlords were hoovering up homes at foreclosure auctions and turning them into rentals. In that period, rents fell in comparison to similar neighborhoods because corporate landlords were increasing the supply of rentals. Then a few years later, there was a period when home prices fell in neighborhoods with a lot of corporate landlords. Gorback says this surprised her. She still doesn't know exactly why it is, but pointed to some other research that says, basically, as big landlords made more rentals available, younger and more racially diverse and less wealthy people moved in.
GORBACK: And so if those renters look very different from the incumbent homeowners and they value different local goods and services, then you end up seeing outmigration of some of the incumbent homeowners as well.
FOUNTAIN: Gorback did find one period in recent history when areas with high concentrations of large investors saw both higher rents and higher sale prices.
GORBACK: Housing markets went crazy during COVID.
FOUNTAIN: Sure. Banananas (ph). Yeah.
GORBACK: That's one of the technical ways that we would describe it. Yes.
FOUNTAIN: (Laughter).
She thinks part of this could've been that big landlords had fancy, and maybe not even legal, pricing software that helped them anticipate what people would pay during the COVID housing scramble. As for right now, the Trump administration's executive order, these big landlords control only a small part of the market. So Gorback is skeptical that the executive order targeting them will move the needle for affordability very much. Though she says, it could help in areas where they have the most properties.
GORBACK: There might be some neighborhoods in Charlotte, Atlanta, Phoenix that do see some price relief.
FOUNTAIN: A Whitehouse spokesperson told us that the president is committed to exploring every tool possible to improve housing affordability.
Nick Fountain, NPR News. Transcript provided by NPR, Copyright NPR.
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