According to Citi Research, the selloff in Invitation Homes (INVH.US) and American Homes 4 Rent (AMH.US) appears excessive following remarks by US President Trump on Wednesday regarding a potential ban on institutional investors purchasing homes. After Trump's comments, shares of single-family rental REITs like INVH and AMH gapped down at the open, ultimately closing approximately 6% and 4% lower, respectively, on Wednesday. Private equity-related stocks also experienced significant declines in response to the news.

Analyst Nick Joseph noted in a report, "If INVH and AMH are forced to liquidate or choose to do so because they cannot grow their portfolios, we believe this could actually serve as a positive catalyst for their share prices, as both companies currently trade at a substantial discount to their net asset value." He further added that the Trump administration is unlikely to prevent AMH from advancing its development projects or stop INVH from entering into development agreements with home builders, as both activities ultimately increase housing supply.

The report also stated, "The concept of banning institutional home purchases has been discussed for years. While it now seems more probable, many investors have already carefully considered the potential implications should such a ban become law."