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Why are Blackstone stocks falling today? Trump's single-family home move sparks chaos
Trump's bold housing proposal to ban institutional investors from buying single-family homes causes a sell-off in Blackstone stocks
Blackstone Inc. shares plunged on Wednesday after President Donald Trump announced plans to ban large institutional investors from buying single-family homes.
Trump made a Truth Social post where he declared he would call on Congress to codify the ban, and wrote, “people live in homes, not corporations.”
The announcement caused the Blackstone stocks to fall as much as 5% in midday trading. Similarly, losses were seen across the real estate sector.
Read more: Blackstone-backed Horizon Industrial files ₹2,600-cr IPO papers with Sebi
Impact on the stocks and why?
Blackstone is the massive asset management company that oversees over $1 trillion and has acquired hundreds of thousands of single-family houses and apartments to create one of the biggest rental housing portfolios in the nation.
In August, Blackstone revealed to CNBC that it owns "less than 1% of the housing available" in every market in which the asset management conducts business. Properties are frequently renovated by the corporation before being relisted.
However, Blackstone's detractors claim that the company is purchasing a large number of properties in a housing market that is already overstretched, decreasing supply and driving up prices.
Trump's announcement triggered the sell-off as investors predicted that tighter restrictions on institutional home buying could erode future investment returns and growth prospects for firms heavily exposed to the housing sector.
Read more: Casagrand gets ₹700 cr investment from Blackstone for 4.2 mn sq ft development
Political rationale
Trump said the proposal is part of a broader effort to address housing affordability. He said that skyrocketing costs have made the “American dream” increasingly unreachable for younger and middle-income Americans.
In his post, Trump stated that he would address the subject in more detail at his upcoming speech at the World Economic Forum Davos conference toward the end of January, along with other housing and affordability-related suggestions.
