As has become the norm, the American housing market is in flux, with affordability, supply, interest rates, and investor activity making headlines and fueling policy debates. On January 20, 2026, President Trump signed an Executive Order that takes aim at “large institutional investors” buying and renting “single-family homes.” The Order instructs various agencies, including HUD, to issue guidance that will “combat speculation in single-family housing markets by Large Institutional Investors.” There is, however, instruction to carve out build-to-rent projects from these attacks.

To the extent the forthcoming policies will inhibit institutional investment in single-family homes for rent, “SFR,” should Wall Street pivot to build-to-rent (“BTR”)?

We should distinguish the two types of SFR: scattered-site SFR and BTR. Scattered-site investment in SFR occurs through investors purchasing individual homes in traditional single-family communities. This is what we think of when we hear salacious headlines like “Wall Street is crushing the American Dream.” Build-to-Rent differs to the extent that it adds supply to the total housing stock by building new homes with the intention of investors holding them long-term and renting them to American families. Whether or not there is veracity in the clickbait headlines, President Trump’s and popular opinion surrounding BTR are apparently less negative.

According to Redfin, SFR is only about 31% of all rental housing in the U.S., and of that, CBRE states that less than 2% is owned by large investors. The overwhelming majority of single-family rentals are owned by small mom-and-pop investors. BTR construction starts peaked in mid-2023, and, though they have slowed, investment in BTR remains exponentially higher than pre-COVID times.

Investing in BTR requires knowledge of the homebuilding industry, which investment in existing housing stock does not. If more investors do, in fact, pivot to BTR, they should consider creating their own homebuilding subsidiaries, partnering with tried-and-true developers or homebuilders, acquiring completed BTR communities with takedowns as construction progresses, or financing BTR developments.

President Trump’s Order mandates that the Secretary of the Treasury develop definitions of “large institutional investor” and “single-family home.” For a number of reasons, including acquisition and operational efficiencies, renter demand, and higher rent growth rates, investors in residential real estate should take a serious look at SFR. The forthcoming definitions will reveal the real impact of the Order, but in the meantime, BTR looks like the less restricted path to investing in single-family homes.