Immigration Fuels Largest 1-Year Population Increase in US History

Immigration has been a pivotal force behind the largest one-year population increase in U.S. history, with significant implications for the housing market and job sector. This demographic shift is bolstering demand for housing, particularly rentals, while expanding the labor pool and mitigating wage inflation. Moreover, an era of unprecedented wealth creation, primarily among U.S. residents born before 1970, is driving a surge in housing demand despite high mortgage rates. This wealth boom has enabled older generations to purchase and remodel homes at an increasing rate, further stimulating the housing market.

The transition to remote work has emerged as a transformative trend, now accounting for roughly 30% of full workdays, a significant rise from its pre-pandemic levels. This shift has allowed individuals to relocate to areas where housing is more affordable, sparking continuous demand across the country. Meanwhile, the aging baby boomer generation is gradually releasing homes into the market, debunking the myth of a looming ‘silver tsunami’ of available housing. Although a substantial number of homes will eventually be listed due to this demographic trend, the impact is expected to be less dramatic than anticipated, with many properties transitioning to single-family rentals rather than hitting the market for sale.

For commercial real estate investors and industry executives, these trends underscore the necessity for strategic planning and investment in the housing sector. There is a clear directive to anticipate stable demand for housing, influenced by remote work habits and generational wealth transfer. Additionally, monitoring the “4 Big Influencers” – government policies, economic cycles, technological advancements, and societal shifts – is crucial for identifying emerging trends and adjusting business strategies accordingly. This holistic approach to demographic analysis provides a comprehensive view of the housing industry, enabling informed decision-making and investment in a rapidly evolving market landscape.

Our take (from the Straight to Smart newsletter):

Dueling Job Narratives

Article Excerpt:

Key takeaways

  • Immigration is fueling record-high US population growth, propping up housing and jobs.
  • Massive wealth creation supports housing activity.
  • Working from home allows people to move where housing is more affordable.
  • Aging baby boomers are staying in their homes longer and won’t be adding much to the resale supply.

Click to read original article: Immigration Population Growth

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