Vice Presidential candidate Sen. J.D. Vance, R-Ohio, in untangling the downstream effects of immigration on the labor market, wages, and a rapidly changing American way of life in a New York Times interview, also touched on the U.S. housing market’s palpable supply crunch.
While real estate market dynamics are highly local with different factors in different markets — location, location, location — overall, housing affordability is in the tank.
According to the National Association of Realtors’ Housing Affordability Index, just three years ago, a homebuyer could afford a median-priced home on a $58,000 income. To afford the median home today, a household needs to earn $108,000, about 46% more.
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The median-income family of four earns $102,000 annually, no longer enough to afford the median home.
Myriad factors have affected housing affordability. Many owners are locked in with low rates and unlikely to list. Higher mortgage rates in recent years, which paradoxically went up after the Fed’s latest cut, have affected affordability. While the short-term rental market appears to be collapsing, the Harvard Business Review found a recent glut of AirBnb investors diverted single family housing stock from the market, driving up rent and bringing down supply.
Real estate is highly sensitive to supply and demand considerations. At the end of the day, affordability comes down to the ratio of monthly payments to take-home pay, and especially, downstream of those other factors, housing supply.
But has the surge of immigration of the Biden-Harris administration affected housing affordability?
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According to economist Amy Nixon, a Dallas housing analyst, the supply and demand considerations are cut and dried.
Guys, this isn’t rocket science.
We’ve added an estimated 4 million Illegal immigrants since 2021 with Biden and Harris in office
A recent Zillow report says the US is short 4 million housing units
No need for mental gymnastics on what is happening and why pic.twitter.com/jtGf8eGdGE
— Amy Nixon (@texasrunnerDFW) October 11, 2024
MORE NEWS: Locals welcome Lake County private prison’s reopening to house illegal immigrants for ICE
Nixon’s likely low estimate of 4 million new illegal immigrants since 2021 (a Yale and MIT study found there were already as many as 22 million illegal immigrants in the U.S. in 2018) could actually conceal the extent of the demand pressures of immigration on the housing market.
More than 3 million undocumented immigrants own homes in the USA
Illegal immigrants are encouraged to apply for US government backed home loans using ITIN numbers—with home prices at record highs
We did this before.
It didn’t end well. pic.twitter.com/KcncvpEEjV
— Amy Nixon (@texasrunnerDFW) February 3, 2024
There is also indication that some new construction could be aimed specifically at accommodating the influx of illegal immigrants and migrants. In other words, new development that should reduce supply pressures for Americans specifically caters to demand from immigrants.
👇CLIP: TX Land Developers Are Making MILLIONS Housing Illegal Migrants
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There are illegal migrant housing communities deep in the heart of Texas and developers are making millions marketing them to border crossers.… pic.twitter.com/Lt6hNzIRYH
— Sara A. Carter (@SaraCarterDC) January 31, 2024
A Nevada Globe report indicated that the state’s 562% increase in the illegal immigrant population was behind the state’s parabolic urban sprawl.
Report: Immigration is #1 cause of urban sprawl in NV.
Since 2021, NV has seen an increase of 562% in the state's illegal immigrant population. https://t.co/9NJxhyPldC
— Nevada Globe (@NevadaGlobe) October 4, 2024
Add to that massive government spending on housing illegal immigrants and migrants, and citizens facing a housing supply crunch and all-time low affordability will pay twice.
The diversion of tax revenues to house illegal immigrants and migrants could have the downstream effect of putting home ownership further out of reach for taxpayers.
They spent 941 million on housing illegals. pic.twitter.com/owY9AWSkaH
— Trisha Hope – National Delegate-TX (@JustTheTweets17) October 2, 2024
The pursuit of cheaper foreign labor and Americans preferring passive income from short-term rentals versus innovative and productive pursuits has added to the pressure.
Factor in the tailwind of government subsidies behind migrant housing demand that caused rents to skyrocket in places like Springfield, Ohio, and the sheer demand of millions of recent arrivals in the U.S., coinciding with high interest rates and shocking increases in government spending explains housing affordability’s perfect storm.