Introduction
In the recent years spanning from 2022 through the first half of 2024, the United States witnessed a significant uptick in immigration. According to the Congressional Budget Office (CBO), this period saw a remarkable addition of 6 million people to the US population, primarily due to net immigration, marking an annual rate of 3 million—a stark increase from the average of 920,000 per year observed during the decade of 2010–2019.
Continued High Immigration Rates Through Mid-2024
Research by John Burns Real Estate Consulting (JBREC) supports that this high level of immigration persisted into the early months of 2024. However, with recent decreases in border activity, predictions indicate a return to more traditional immigration levels. Despite this projected normalization, the immigration rates so far suggest a substantial contribution to population growth for the year.
Webinar Insights on Immigration’s Impact on Housing
A recent webinar titled “US Demographics Insights and Strategies for 2025 and Beyond” shed light on how immigration has influenced housing demands, particularly in the rental and for-sale sectors. Here are the key takeaways:
Significant Increase in Renter Households
The influx of new immigrants has significantly impacted the housing market, particularly in the rental sector. It is estimated that out of the 700,000 new households formed due to increased immigration, 600,000 were renter households. This number represents 133% of the new multifamily units completed annually on average.
Homeownership Also Rises
On the homeownership front, the surge in immigration from 2022 to 2024 is estimated to have added 100,000 homeowner households, accounting for 10% of the new single-family homes completed annually during this period.
Looking Ahead to 2025
Future projections suggest a slowdown in immigration rates by 2025, with annual figures expected to decrease to around 1.6 million. This reduced rate of immigration is likely to dampen its stimulative effect on housing demand, especially within the rental market.
Conclusion: Strategic Investments Recommended
As international immigration decelerates, domestic migration and significant pent-up demand are poised to drive net household growth in local markets. For investors and developers, focusing on metropolitan areas with high domestic migration and substantial demand for new homes is recommended to capitalize on these evolving demographic trends.
Optimal Investment Strategy
To maximize returns, stakeholders in the real estate sector should target areas with robust domestic migration patterns and where there is a backlog of demand for housing. This strategic focus is expected to unlock new opportunities in the coming years, especially in areas with high rates of young adults living with parents or roommates.
