This week, the U.S. House passed the “End Hedge Fund Control of American Homes Act,” a federal housing proposal introduced by Senator Jeff Merkley and Representative Adam Smith that would severely limit the ability of large institutional investors to buy and hold single-family homes across the country.

The bill, now S.3402 in the Senate and H.R.6608 in the House, has quickly become one of the most watched housing bills in the nation as lawmakers respond to growing concerns over affordability, investor-owned housing, and the shrinking availability of starter homes in many American communities.

The proposal specifically targets large corporate landlords, hedge funds and private equity-backed housing firms that lawmakers say have increasingly turned residential housing into a large-scale investment asset, rather than a traditional path to homeownership for families.

The bill now heads to a likely closely watched battle in the Senate, but even before it becomes law, the legislation is already sending shockwaves through real estate industry, investment firms, and housing policy circles across the country.

The proposal is of particular importance to real estate professionals in South Carolina, where institutional investor activity has exploded in recent years across many of the state’s fastest-growing markets.

Since the pandemic-era migration boom began, investor-owned housing has surged from Charleston and Myrtle Beach to Greenville, Hilton Head, and fast-growing suburban communities. Large corporations have spent billions of dollars nationwide to buy homes in fast-growing Sun Belt states, often targeting areas with strong population growth, favorable tax environments, and increasing rental demand.

Supporters in Congress of the bill say that wave of corporate home buying has contributed to affordability challenges by lowering the number of homes available for traditional buyers and increasing competition in markets already constrained by supply.

The legislation would impose new limits on how many single-family homes large institutional investors can own and continue to buy up. Some rules would also require certain companies to divest portions of their housing portfolios over time through phased divestment requirements.

Backers say the measure is meant to help level the playing field in housing markets where local buyers increasingly are finding themselves in competition with big corporations that have large piles of cash and all-cash offers.

Institutional investors have become major players in local markets, especially in suburban developments and new construction communities, as many South Carolina REALTORS® have seen for the past few years. Some investors bought homes in bulk directly from builders before the properties ever reached the traditional buyers' market.

The trend was most pronounced during the housing frenzy’s peak from 2021 to 2024, when bidding wars, record-low inventory, and demand fueled by migration put intense pressure on much of the Southeast.

First-time buyers found starter homes especially difficult to secure, as many prospective homeowners repeatedly lost out to cash-heavy investors willing to waive contingencies and close quickly.

Now housing affordability has become one of the most politically charged issues in the country, and lawmakers from both parties are feeling the heat to act.

Supporters of the bill say institutional ownership has fundamentally changed the dynamics of the housing market in many communities. They say single-family homes are increasingly being viewed as long-term investments rather than owner-occupied residences, particularly in high-growth states where population increases continue to strain available supply.

Proponents of the bill say limiting big-time investor ownership could make it easier for families trying to get into the housing market to compete for homes and have a better chance.

The investment and rental housing industries are also reacting strongly to the proposal.

Critics of the bill say institutional investors have been crucial to expanding rental housing options at a time when many Americans have been priced out of homeownership. Some economists and investor groups warn the bill may create unintended disruptions in rental markets or discourage future housing investment at a time when the country still faces a major supply shortage.

Others argue institutional investors are a small part of the larger affordability problem and that restrictive zoning laws, slow permitting processes, labor shortages, and underbuilding are still the main drivers of America’s housing crisis.

But the political momentum for investor-related housing reform has definitely picked up steam in 2026.

More and more, lawmakers are proposing legislation related to:

• investor-owned housing
• short-term rental restrictions
• affordable housing incentives
• zoning reform
• corporate landlord regulation
• housing supply expansion

The South Carolina market is right in the middle of many of these national trends.

The state’s housing market is starting to transition to a more balanced market with increased inventory and slower price growth, while migration into South Carolina continues to be strong. Long-term demand across much of the state continues to be driven by buyers from states such as New York, New Jersey, Massachusetts, Florida, and California, who continue to move to the Carolinas in large numbers.

South Carolina has become one of the nation’s most desired locations for developers and institutional investors, thanks to the continued influx of migrants.

Real estate professionals across the state are now watching closely to see whether the Senate moves the bill forward and what impact the final language could have on:

• build-to-rent developments
• Portfolios owned by investors
• supply of rental housing
• “suburban development work”
• competition for starter homes
• Approaches to future acquisition

Many agents also think the legislation could change inventory conditions at some point if big investors cut back on buying or start selling some of their existing holdings back into the open market.

At the same time, some brokers warn that investor restrictions alone are unlikely to solve the housing market’s challenges. South Carolina, like most of the country, is still working through years of underbuilt housing supply, rising construction costs, infrastructure limitations, and rising affordability issues tied to insurance and property taxes.

But the House vote is one of the clearest signs yet that investor-owned housing has become a hot-button issue in the national housing debate.

For South Carolina REALTORS®, developers, investors, and homebuyers, the outcome of this legislation may help determine what the next phase looks like for the state's fast-changing housing market.