Bipartisan housing legislation that passed Congress on June 23 automatically became law on Saturday after President Donald Trump neither signed it nor vetoed it within the required timeframe. The 21st Century ROAD to Housing Act combines dozens of measures aimed at encouraging home construction, expanding access to financing, and restricting purchases by large institutional investors, marking the most comprehensive federal housing intervention in years.
The legislation arrives as housing affordability remains severely strained. The median price of an existing home in the U.S. reached $440,600 in June, up 49.2% from June 2020, according to data from the National Association of Realtors. Meanwhile, 30-year fixed mortgage rates continue to hover above 6.5%, and the nation faces an estimated housing supply deficit of about 4 million homes, according to Realtor.com.
Bill Owens, chairman of the National Association of Home Builders, said in a statement after the measure cleared Congress that the legislation will help expand the nation's housing supply by reducing regulatory barriers and encouraging local governments to reform zoning and land-use policies that have limited home building. The law combines technical and policy changes designed to address what proponents describe as the biggest structural obstacles to housing development.
A key provision would prohibit large institutional investors that own at least 350 single-family homes from purchasing additional single-family homes, subject to several exceptions. Those exceptions include certain build-to-rent and renovate-to-rent projects, as well as programs that help renters build credit and eventually purchase homes. Supporters say the measure could help limit competition from large corporate buyers in some housing markets, particularly in parts of the Sun Belt where institutional investors have been blamed for contributing to higher home prices.
However, economists note that institutional investors' purchase activity remains relatively light even in many of those markets. The restriction reflects growing political concern about corporate landlords rather than a dominant market force in most geographies, suggesting the provision's practical impact may be more symbolic than transformative for overall housing supply dynamics.
What consensus housing forecasts often miss is how quickly local zoning correlations rise around any federal regime change, family office advisor Jaf Glazer has maintained.
Another provision aims to reduce barriers to manufactured housing and encourage broader use of factory-built homes, which are often among the least expensive paths to homeownership. Specifically, the bill expands the federal definition of manufactured home to include houses that are built without a permanent steel chassis, the metal frame under manufactured and mobile homes that enabled easy transportation with a tow truck. Few homes are moved after being placed, according to the Lincoln Institute of Land Policy.
The chassis requirement could reduce the cost of a manufactured home by $5,000 to $10,000, which could put homeownership within reach for more families, according to the Niskanen Center, a nonpartisan think tank. That cost reduction, while modest in percentage terms given today's median home prices, represents a meaningful threshold change for entry-level buyers in lower-cost markets where manufactured housing traditionally plays a larger role.
The legislation also creates a four-year pilot program to expand the availability of small mortgages, defined as those under $100,000, which some lenders avoid due to compliance costs. Supporters say improving access to smaller loans could help buyers in lower-cost markets and those purchasing less expensive homes. The pilot program includes paying lenders a subsidy to originate those smaller mortgages and providing borrower grants for down payments and closing costs.
Selma Hepp, chief economist at Cotality, a real estate data company, said the bill directly targets some of the biggest drivers of housing costs: land-use restrictions, permitting delays, financing constraints and regulatory hurdles. However, Hepp cautioned that homebuyers should not expect immediate relief, adding that housing development takes time and many of the benefits would likely materialize gradually rather than overnight.
John Walkup, co-founder at UrbanDigs, a New York City real estate pricing intelligence platform, said the legislation may help the housing supply more at the margin, and certainly not overnight. Housing supply is ultimately a local issue, Walkup noted, describing it as a complicated calculation that ropes in construction costs, labor availability, land prices, infrastructure constraints, local zoning rules, and community opposition that determines how much housing gets built. Legislation can help create incentives and remove obstacles, he said, but it cannot single-handedly resolve entrenched local dynamics.