So here's a fun housing policy debate: JPMorgan Chase & Co. JPMorgan Chase (JPM) CEO Jamie Dimon thinks one of President Donald Trump's signature proposals is, well, kind of pointless.
In a Tuesday interview with CBS News, Dimon pushed back on the administration's idea to ban institutional investors from buying single-family homes. His reasoning? The numbers just don't add up to make it matter.
"I hate to tell you this, it's basically irrelevant," Dimon said. "Only 1% of the homes are owned by what you would call large companies. I don't think it's gonna change any calculus."
Trump has called for prohibiting investors who own more than 100 properties from buying more homes. But here's the thing: experts at LPL Financial put institutional ownership at just 0.5% to 3% of all U.S. single-family homes, and that ownership is concentrated in specific markets like Atlanta, Phoenix, and Charlotte. Blackstone Inc. (BX) has highlighted these same figures. When you're talking about a problem that affects maybe one out of every hundred homes, a ban starts to look like using a sledgehammer to crack a very small nut.
The Actual Problem, According to Dimon
Dimon argues that if you really want to fix housing affordability, you need to look at zoning laws and mortgage rules, not who's buying the houses.
"The reason we're not building more affordable housing is because of local zoning requirements and mortgage origination rules that made it so expensive to get a mortgage. We could reduce the cost of that mortgage," he said.
He's not alone in this view. California Governor Gavin Newsom essentially admitted the same thing, saying, "We're as dumb as we want to be on housing, and we haven't been able to get out of our way." The cost to build multifamily housing in California is already twice that of other states, which tells you something about how regulations can drive prices.
Some homebuilders aren't waiting for policy fixes. Lennar Corp. (LEN) and Taylor Morrison Home Corp. (TMHC) are reportedly planning to build one million entry-level "Trump Homes" where monthly rents convert to a down payment after three years. That's a $250 billion target, which suggests the private sector sees both a problem and an opportunity.
Mortgage Rates Aren't Helping
Meanwhile, the broader mortgage market is adding its own kind of pressure. The average 30-year fixed rate hit 6.38% this week, according to Freddie Mac (FMCC). That's a six-month high, up from 6.22% the prior week.
Here's a twist: rates had briefly dipped to 5.98% after President Trump ordered Freddie Mac and Fannie Mae (FNMA) to expand their purchases of mortgage-backed securities. But that relief didn't last—rates have now risen for four consecutive weeks. So even when there's a policy move aimed at making mortgages cheaper, the market has its own ideas.
The takeaway here is pretty clear. When the CEO of America's largest bank says a proposed policy is "basically irrelevant," he's not just offering an opinion—he's pointing to data that shows institutional investors are a tiny player in a massive market. The real issues, according to Dimon and others, are the regulatory hurdles that make building and buying homes more expensive for everyone. And until those get addressed, banning a few big buyers probably won't make your mortgage any cheaper.
