Lower immigration & housing demand

Investment Analysis Clubs Macro Economic Trends and Risks
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Lower population growth leads to lower housing demand, making it easier to make up the housing deficit.

Last year’s population growth came to about one percent or about 3.3 million people. (The data are estimated as of July 1 of each year, so the latest numbers are one year old now.) But most of the increase came from immigration net of out-migration. The U.S. natural increase—the excess of births over deaths—was just half a million people. The other 2.8 million people moved here from other countries.

Immigration began dropping in the months preceding President Trump’s second election. Now we have deportations and probably an increase in voluntary moves out of the country. If net immigration is currently zero, then our population growth is about 15 hundredths of one percent or roughly half a million people. We live with about 2.6 people per occupied housing unit, on average, so that half a million population increase implies a need for about 200,000 new housing units. In the last 12 months, we have built about 1.4 million units…

Abandoned farmhouses in Vermont don’t help Miami and Houston accommodate their growth. Adding up only the counties that are growing implies an additional 50,000 housing units needed beyond what total population growth would dictate.

DB2

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Anything real estate is location, location, location. Over the past 8 years or so, housing prices have come close to doubling in the most desirable areas of where I live. In that same time, seen an increase in license plates form CA, NY, and IL. So those abandoned farm houses aren’t helping me either.

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Sure, but looked at from a higher altitude, demographics trumps all.

DB2

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I think we know urbanization is a major factor. Mechanization and smaller family size mean much larger farms but also fewer job opportunities for those who want to stay. Two career families also have more choices in urban areas. High prices make the most desirable areas costly but many settle for the suburbs, sometimes distant suburbs for a reasonable compromise. Can commute to job or city events while living in a comfortable area—often thanks to good highways.

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