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| The American Dream: Immigrants not welcome by order of Donald Trump. |
A climate of fear has descended among recent immigrants to the United States. Amid fears that they may be soon be deported or otherwise discriminated against for some trumped-up reason--like being Muslim--many are becoming increasingly reluctant to become first-time homeowners. Insofar as a fairly significant share of these homeowners are immigrants, the US housing market may soon be
experiencing the consequences of Trump's xenophobia and general misanthropy:
President Donald Trump’s immigration policies threaten to crack a foundation of the American economy: the residential real estate market. Legal and otherwise, immigrants, long a pillar of growth in homebuying, are no longer feeling the warm welcome and optimism necessary for their biggest purchase...
On Tuesday, the Trump administration detailed plans for a sweeping crackdown on undocumented immigrants, saying the authorities would deport many more people without court hearings. Under Obama, the government focused on those convicted of violent crimes; Trump would lower the bar to include fraud and, in some cases, a belief the residents threatened public safety.
Even workers with green cards and work visas under the H1-B program for skilled foreign workers are worried about possible restrictions under Trump. The housing markets most at risk include Miami, Silicon Valley, Los Angeles, San Francisco and New York, which have the biggest concentrations of foreign-born buyers...
“If Trump gets the immigration plan he wants, the housing market will get hit harder than any other,” said Alex Nowrasteh, a policy analyst for the libertarian Cato Institute. If “millions of people get deported and more people don’t come in to take their place, then you’ll have downward pressure on home prices, especially in urban areas.”
Their numbers are substantial. What's more, they were expected to pick up a lot of the slack after the baby boom generation:
A third of the 11 million unauthorized immigrants in the U.S. live in a home that they or a family member or friend own, according to an analysis by the Migration Policy Institute, a Washington-based think tank...
If financing dries up and borrowers lose faith, it will mark a major reversal in the market. New arrivals are expected to account for more than a third of growth of homeowners this decade, according to University of Southern California demographer Dowell Myers.
While the U.S. homeownership rate in 2015 was the same as it was in 1994 -- 66 percent -- it has risen 2.4 percentage points for the foreign-born population, to more than half, according to real estate website Trulia.
The
hit to US housing will not be confined to what are commonly understood to be "gateway" locations. As immigrants have spread throughout the continental United States, their [loss of] numbers guarantee a significant hit to housing demand if they call a buyer's strike on Trump:
“There are consequences for the economy and the whole of society, and the public doesn’t understand the value immigrants bring to the housing market,” warns Dowell Myers, director of the Population Dynamics Research Group at the University of California. “They represent a large share of the demand supporting house values. If you were to subtract any part of that demand, it would jeopardize house values across the board.”
In a comprehensive 2013 study, Immigrant Contributions to Housing Demand in the United States, Myers estimated that in this decade, immigrants nationwide will account for 32.2% of the growth in all households, 35.7% of growth in homeowners and 26.4% of growth in renter households. The study found that the volume of growth in foreign-born homeowners has increased each decade, rising from 0.8 million added immigrant homeowners in the United States during the period from 1980–1990 to 2.8 million in the current decade.
While immigrants were once concentrated in a few gateway states, such as California, New York and Florida, the pattern of immigration after the 2007 economic crash is less concentrated, making the economic effect of mass deportation less easy to predict.
The full report on migrants' contributions to housing demand is
here. Think of it: over a third of prospective home buyers may be gone
just like that. It 's fully plausible that the next economic downturn Stateside will begin in the housing sector. There are several notable past precedents for this, and Trump's unvarnished bigotry is just the thing to set another downward spiral into motion as substantial new immigrant demand dissipates c/o Trump.
