When Retirement Money Meets Housing: How a New Executive Order Could Hurt StepReady Buyers
Last week, a new executive order directed the Department of Labor and the SEC to revisit their rules on what can be offered in 401(k) retirement plans.
Buried in the language was a big shift: potential inclusion of private market real estate and other “alternative assets” in these plans.
On the surface, it sounds like diversification — letting everyday retirement savers invest in the same asset classes as big institutions.
But from a KeyStep perspective, this could be a turning point for housing markets, especially in neighborhoods where StepReady buyers live.
What the EO Actually Does
It doesn’t let you put your own home in a 401(k).
It would allow certain 401(k) plans to offer pooled funds that invest in private real estate — think large-scale property portfolios, not individual starter homes.
Those funds are usually run by institutional managers who buy and hold properties for profit, not for local owner-occupancy.
Why This Matters for StepReady Households
Institutional buyers already have the upper hand in many local housing markets. They:
Pay cash.
Move quickly.
Outbid families by tens of thousands of dollars.
Target neighborhoods with lower prices and higher rental yields — often the very communities where first-generation, low-income, and marginalized households are looking to buy.
Opening up 401(k) dollars to these funds means:
A new flood of capital into the same entry-level housing stock StepReady buyers need.
Faster price escalation in at-risk neighborhoods.
Reduced supply of homes available to first-time buyers.
The Compounding Cycle
Here’s how this change could play out in real time:
Retirement plan rules change.
401(k) money starts flowing into private real estate funds.
Those funds target high-yield markets — often working-class, minority, and first-gen neighborhoods.
Homes are purchased as investment properties, not family homes.
Prices and rents climb, locking out the next wave of would-be buyers.
Why Communities Should Care
This isn’t just about housing prices — it’s about who gets to build wealth.
If more of our housing stock becomes a retirement product rather than a family asset, we shift ownership — and the benefits of equity growth — away from local residents and into the hands of Wall Street–run funds.
For StepReady buyers, that means fewer options, higher costs, and a steeper climb to homeownership.
KeyStep’s role is to protect and expand the path to ownership for those on the cusp.
When policy changes — even ones that seem far from housing — risk making that climb harder, we have to name it, explain it, and push for solutions that keep homes in the hands of the people who live in them.
