The Housing Crisis: Your Biggest Questions, Answered
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Access to affordable credit helps me pay my employees, but I don't really need it.
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Tell Congress, stop the Durbin Marshall money grab for corporate megastores. Paid for by the Electronic Payments Coalition. Hey, YMB listeners. It's Imani Moise for The Wall Street Journal. Your Money Briefing is on hiatus, but today we're wrapping up our special series on housing, one of the biggest financial challenges facing Americans today. This week, we've explored the forces driving the affordable housing crisis and potential solutions. But many of you still had questions, like, when will mortgage rates finally come down? And why can't we just build more suburbs? In the final episode of our housing series, What's News host Luke Vargas sits down with WSJ Real Estate Bureau Chief Craig Carman to separate fact from fiction and answer your biggest questions about America's housing market.
That's after the break.
Craig, in recent days, we have looked at the U.S. housing shortage from a number of different angles here across our podcast, from difficulties facing towns, difficulties facing builders, and of course, to the many challenges facing buyers. We've also looked at some ideas about how to fix both sides of the supply-demand equation in housing. However, our listeners and journal subscribers have had a lot to add into the discussion, some areas as well where they would like additional clarity on things. So let's address some of those questions and start with a big one, a topic that has spurred quite a lot of debate across our coverage. Are immigrants living in the U.S. unlawfully worsening the housing shortage?
In 2024, Donald Trump pledged to ban immigrants who are in the U.S. illegally from from getting mortgages. Last year, Vice President Vance claimed that they were, quote, taking houses that ought by right to go to American citizens, end quote. Craig, what's the situation here?
What questions are listeners asking about America's housing crisis?
Yeah, it's a complicated question. And you're right, it's become a highly political one. And there was a study from the Urban Institute, a think tank in 2023, that said home loans to undocumented immigrants living in the U.S. are legal but not very common. There was around 5,000 or so loans. mortgages to undocumented immigrants. And consider that is out of a total that year of about 3.4 million mortgages for home purchases. On the rental side, it's a bit more complicated and there's potential for impact there. The Pew Center said that undocumented immigrants lived in a little more than 6 million households in the U.S., rental households, and that's about 10% of all the rental households.
And there's other dimensions of this as well, right? Construction as an industry employs a lot of immigrants as well, deport them. I don't know, do construction pressures worsen? Because that kind of ties into another comment we received, which was, you know, pointing out another topic in the headlines these days, tariffs on steel and aluminum, sort of implying there, you know, maybe this administration's policies are sort of sabotaging efforts to make housing more affordable on a wholly different front.
I think they are, to some, they're not the driving factor. The National Association of Home Builders said that tariffs, which includes stuff like on steel and aluminum, added about $10,000 to the cost of building a new home. And when you consider that the average home costs about $400,000 to build... $10,000 adds to it, but it's not a huge driving factor. I think in the end, the cost of land, the cost around permitting, infrastructure requirements, conforming with zoning restrictions and building codes, those tend to be bigger factors pushing up the cost of housing. And as you were alluding to earlier, labor costs are rising.
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