Back in 2020, Ashley Maxwell and her husband were looking to buy their first home, near Indianapolis.

“We looked at over 80 homes in probably a span of two months,” she said.

The couple was in a tight spot. They had three kids and were forced to move because their landlord was selling their rental. That pressure made their search all the more frustrating.

“We would pull up to a house, our agent would get out and be like, ‘There’s 10 additional offers, sight unseen, all cash.’ Typically that means it’s an investor,” Maxwell recalled.

The couple, who eventually found a place, was one of many whose path to homeownership was stymied by a nationwide surge of institutional investors, then driven by record-low mortgage rates, snapping up single-family homes to rent out.

It’s an issue that President Trump now aims to take on. In a recent social media post, he said he wants to “ban large institutional investors from buying more single-family homes,” to help bring down housing costs.

It’s a popular idea, especially among some Democrats. But passing such laws has proved difficult, and economists say the link of investor-owned homes to high prices is not so simple.

A cap on investor rentals just took effect in this city

In Fishers, Ind., a suburb of Indianapolis, Republican Mayor Scott Fadness was taken aback when he saw new data in a housing report compiled by his team that showed the extent of investor landlords in his city.

“We have neighborhoods today that are now creeping up to 35, 38% of the homes have been purchased for investment purposes,” he said.

It got so bad, he recalled, that one of his employees who was house hunting sent letters to homeowners, explaining that they were going to work for the city “and would they please consider allowing them to buy the home” instead of an institutional investor.

To address the problem, Fadness last year proposed capping rentals at 10% per neighborhood to protect local homeownership.

“It’s been a source of generational wealth in our country for a very long time, particularly in the middle class,” he said. “I hate to see that go away.”

It’s also more difficult, he said, to deal with code enforcement and other issues when the property owner is an out-of-state corporation.

Realtor groups opposed a cap, arguing it infringed on private property rights and could deprive sellers of the highest bid, but the City Council backed the plan unanimously. The new law just took effect Jan. 1.

“It was the first time I had proposed an ordinance in our community where outside interests, business interests, came into town and spent money trying to kill the legislation,” Fadness said.

It was a rare win for such a proposal. Cities and states across the U.S. have debated restricting investor homebuyers, yet most measures have failed to pass. One proposal went nowhere in Congress, which Trump has said would need to codify any ban. California Gov. Gavin Newsom joined Trump this month in saying he’s determined to do something.

Economists say large investors are not the biggest factor driving home prices

But housing experts say it’s too easy to blame corporate landlords entirely for skyrocketing prices.

“People see the connection, but they don’t necessarily separate out the cause and effect,” said Laurie Goodman, an economist with the Housing Finance Policy Center at the Urban Institute.

Prices do go up where investors buy, but she said, “That is part of their strategy,” because the places they choose are already growing. And often, they buy serious fixer-uppers.

“Most of us don’t have the knowledge to do the repairs,” Goodman said. “[Even] if we did, we couldn’t get the financing.”

Nationally, the largest companies own about 3% of the single-family rental market, with larger shares in some places like the Sunbelt. And the institutional buying spree has cooled from its peak in 2022, as higher interest rates have made homes more expensive.

The main driver of rising prices is a housing shortage, Goodman said, and some investors are actually helping to ease that now, by building their own single-family houses to rent.

“The best way to make housing affordable is to simply build more of it — to increase supply,” she said.

The debate continues in Las Vegas

In Las Vegas, Democratic state Sen. Dina Neal still worries that the build-to-rent trend is undercutting people’s shot at homeownership. She pointed to one corporate investor near her district that built an entire neighborhood of houses to rent.

“They didn’t build the whole entire neighborhood to give it up,” she said. “They wanted to make sure they would secure rental income from 200 different families and keep it.”

What’s more, like Fadness in Indiana, Neal worries that investor rentals are priced so high it can become impossible for many people to save up for a down payment. She said her previous next-door neighbor sold to an investor believing she could trade up, but had to rent a place down the street — from a different corporate investor.

Neal has proposed a cap on corporate landlords three times, but Nevada’s Republican governor, Joe Lombardo, has blocked it, most recently last month.

Neal is surprised — and cautious — now that Trump is taking up her cause. “I am trying to figure out how I entered into a universe where I became aligned with a president who is a nemesis to the Democratic Party,” she laughed.

But if Trump’s interest can persuade more Republicans to join the push, she said she’ll take it.