The American housing market is once again at a crossroads. Affordability challenges, limited supply, fluctuating interest rates, and rising investor activity dominate headlines and fuel lively policy debates. On January 20, 2026, President Trump added a new layer to this dynamic by signing an Executive Order targeting “large institutional investors” involved in purchasing and renting single-family homes. The directive aims to “combat speculation in single-family housing markets” by instructing agencies like HUD to issue guidance that curtails such activities—with one notable exception: build-to-rent (BTR) projects are explicitly carved out from scrutiny.

This begs the question: if forthcoming policies restrict institutional investment in scattered-site single-family rentals (SFR), should Wall Street shift its focus to build-to-rent (BTR)?

Scattered-Site SFR vs. Build-to-Rent: Key Distinctions

To understand the implications of this Executive Order, it’s important to differentiate between scattered-site SFR and BTR. Scattered-site SFR refers to investors purchasing individual homes spread across traditional single-family neighborhoods. This form of investment has fueled clickbait headlines like “Wall Street is crushing the American Dream,” as critics argue it drives up home prices and limits ownership opportunities for everyday Americans.

Build-to-rent, on the other hand, offers a more constructive alternative. BTR projects involve developing new homes specifically for long-term institutional ownership and rental purposes, thereby increasing the overall housing supply. While scattered-site SFR often attracts negative attention, public opinion—and even the president’s stance—appears to be less critical of BTR, recognizing its role in addressing housing shortages.

The Numbers Speak: Institutional Ownership and Market Trends

Despite the rhetoric surrounding institutional investors “taking over” the housing market, the data paints a more nuanced picture. Redfin reports that single-family rentals account for only 31% of all rental housing in the U.S., and CBRE highlights that less than 2% of these properties are owned by large institutional investors. The vast majority of single-family rentals are owned by small mom-and-pop landlords.

Meanwhile, construction starts for BTR projects surged to record highs in mid-2023, and although activity has cooled slightly, investment in BTR remains exponentially higher than pre-pandemic levels. As SFR policies evolve, BTR could represent a safer and more scalable avenue for institutional investors seeking a foothold in the single-family rental market.

What Investors Should Know About Build-to-Rent

Investing in BTR isn’t as simple as buying up existing housing stock—it requires a deeper understanding of the homebuilding industry. For investors considering a pivot to BTR, strategic approaches may include:

• Creating Homebuilding Subsidiaries: Establishing a dedicated construction arm to streamline development and maximize efficiencies.
• Partnering with Developers or Builders: Collaborating with experienced industry professionals to reduce risk and accelerate timelines.
• Acquiring Completed BTR Communities: Purchasing completed or near-completed BTR developments through phased takedowns.
• Financing BTR Projects: Providing capital for developers to initiate and complete BTR communities.

These strategies position investors to capitalize on the growing demand for rental housing while contributing to the housing supply—a win-win scenario for both profitability and public perception.

Why BTR Is the Future of SFR Investing

For residential real estate investors, BTR offers compelling advantages, including operational efficiencies, strong renter demand, and higher rent growth rates compared to traditional multifamily products. As President Trump’s Executive Order unfolds, the definitions of “large institutional investor” and “single-family home” developed by the Secretary of the Treasury will ultimately determine the scope of the restrictions. However, in the meantime, BTR appears to be the path of least resistance for institutional investors looking to navigate policy challenges while expanding their portfolios.

The housing market may be in flux, but one thing is clear: build-to-rent isn’t just a trend—it’s a blueprint for the future of single-family rentals.