House prices across the US have escalated, causing significant economic hardship. Politicians and the media increasingly attribute affordable housing crises to financial investors, who are accused of inflating prices, diminishing inventory, and pushing out regular homebuyers. Although investor activity has increased, we argue that the financialization narrative serves as a convenient scapegoat, diverting attention from politicians’ failures to expand the housing supply and shifting blame to Wall Street. This populist narrative is politically expedient: it appeals to the electorate at large while simultaneously protecting organized housing insiders who seek to limit supply. We provide several types of evidence in support of this argument. First, fine-grained address-level data on investor purchases reveal that neighborhoods exposed to housing financialization do not necessarily experience higher housing costs compared to unexposed areas. Second, original survey results reveal that voters across partisan lines are troubled by Wall Street’s role in the housing market, both because it undercuts the American Dream of homeownership and because it challenges the notion of housing as a right rather than a commodity. Third, analyses of local government meetings, legislative activity, and political speeches indicate that anti-investor rhetoric persists even where investor activity is limited. By combining observational data, speech and legislative evidence, and targeted survey interventions—including experiments linking respondents to local investor activity—we show how anti-financialization appeals reinforce populist sentiments and generate a self-sustaining political equilibrium that ultimately hinders the policies needed to address underlying housing shortages.