Homebuilder stocks are tumbling after Bloomberg reported that Trump administration officials are exploring opening an antitrust investigation into US homebuilders as the White House focuses on tackling the country’s housing affordability crisis.

The Department of Justice could open the probe in the coming weeks Bloomberg reported, quoting people familiar with the discussions. It adds that so far no decision has been made and the administration may abandon the effort without launching an investigation.

One potential focus is on how information is shared through an industry trade group called Leading Builders of America, according to the people. Officials have grown concerned that the trade group - whose members include Lennar and DR Horton - could be used to restrict housing supply or coordinate pricing.

The administration’s interest in homebuilders comes during a period where the cost of buying a home is at its most expensive in decades, with the Covid-era housing boom and subsequent interest rate hikes weighing heavily on buyers. It’s also a precarious time for the builders themselves, with the inventory of unsold homes hovering at high levels.

President Donald Trump put the industry on alert in October, when he used a social media post to compare big homebuilders to OPEC, a cartel which control the oil market.

“It wasn’t right for them to do that but, in a different form, is being done again — This time by the Big Homebuilders of our Nation,” Trump wrote. “They’re my friends, and they’re very important to the SUCCESS of our Country, but now, they can get Financing, and they have to start building Homes.”

Builders have been seeking ways to work with the White House to improve housing affordability. One option being discussed is a massive program — dubbed “Trump Homes” — that would seek to add as many as 1 million units of new supply, Bloomberg previously reported.

Ironically, just a few days ago, we reported that the White House is working with some of the the same homebuilders (Lennar and Taylor Morrison) which Trump is now supposedly going after criminally, as the president is working on a massive rent-to-own program to build up to 1 million "Trump Homes" in a boost to affordability. As part of the program, and which would sell entry-level homes to Americans as part of a pathway-to-ownership program funded by private investors. The drawback of this program, we said, is that such a program would be complicated to implement, and may not gain enough support to move forward as it would require substantial capital commitment from the homebuilders. 

Well, what better way to convince homebuilders it's in their best interest to participate in the program than to threaten them with criminal charges on something totally separate...