Immigration policy, economic uncertainty to restructure the housing market

Eric Finnigan – vice president of demographic research at JBRC – opened the webinar with US immigration data since the Trump administration took office last year.

“The (Dallas Federal Reserve) actually estimates that more unauthorized immigrants are leaving the country every month than coming in,” he said. “That’s rare all year. We’ve also been tracking policy changes that have restricted legal immigration channels, so we’re reducing the number of people entering the country.”

The new $100,000 fee imposed on companies filing H-1B petitions has led to an 87% drop in applications from last year, according to a court filing cited by Finnigan.

Finnigan said immigration by 2025 is down 82% year-over-year, the lowest level since the mid-80s.

“What I can say here is that we are predicting this for our customers, who will be out for 10 years, and what that means for housing demand or rent and sales,” he said. “So, I’m not going to share any forecast here. We’ve put that all up to our customers. But I would say plan for 2026 to be even lower than 2025.”

The impact on homes is already visible.

A JBRC survey of homebuilders conducted in mid-March found 41% nationwide with sales and buyer traffic adversely affected by the change in immigration policy.

Regional variation was clear – with 80% of Northwest builders reporting negative impacts.

In the rental market, two-thirds of real estate developers and investors in Florida reported impacts from immigration legislation.

The resale market also felt the pinch. From the June 2025 survey, Finnigan noted that a quarter of agents nationally saw foreign buyers back off during the spring sales season.

“It’s not everything that made last year’s weak spring sales season, but it’s a big part, especially when you look at slow markets,” he said. “It’s in the Northwest, the Southwest, and California.”

Domestic migration is cooling — even in the Sun Belt

As immigration and birth rates decline, net domestic migration has become the primary source of population growth in many metro areas.

But even that engine is slow.

“Americans are still moving south and west. The Sun Belt still attracts the majority of migrant households today,” Finnigan said. “But if you compare the year 2019 to 2025, domestic migration increases the demand for local housing, if you take the average of all the top markets, it is almost half of what it was before the pandemic.”

Some markets that once thrived on immigration have cooled.

Florida — ranked as the fastest growing state in 2021 — saw domestic migration worsen briefly in 2024 and remain weak in 2025.

However, in the state, Ocala emerged as the fastest growing metro area last year, according to JBRC data.

“When we look at growth in Florida and show growth in Florida, we can’t use the same growth rate in Tampa that we use in Ocala,” Finnigan said.

Midwest markets are starting to heat up as affordability draws homes away from more expensive coastal areas.

Younger families are increasingly moving from more expensive areas along the coast and the Northeast to Texas and the South, Finnegan added.

“[The Midwest] “We didn’t see the big increase in prices from 2021 to 2023 that many Sun Belt markets saw,” he said. He has Riverside, California.

“Some markets have gone from good before the pandemic to bad now; central New Jersey, some markets in Florida.”

Consumer confidence is very affected

Maegan Sherlock – manager of consumer research at JBRC – detailed how economic uncertainty has been a key barrier to housing sales.

Half of surveyed consumers currently think the economy is slowing down – up from 37% in June 2025.

“The majority of consumers are pessimistic about the direction of the US economy in the coming year, and that is the largest share in the history of our survey,” said Sherlock. “Part of the consumers also think that we are in a recession.

“When asked why they think we’re in a recession, it comes down to the fact that many consumers feel really depressed – they think the prices of goods and services feel too high.”

That consumer mindset is leading to reckless spending — with nearly half saying it’s a bad time to buy a home.

“While they may be moving forward with big spending decisions, they’re doing so with a limited mindset, and that ultimately translates into slower decision-making times,” Sherlock said.

The fear of overpaying is high on the list of stressors for prospective buyers. Among homeowners, a quarter are waiting for mortgage rates to drop before buying. Of employers, more than half save less money.

Economic uncertainty is the second most common factor holding both parties back, and Sherlock said its impact has been “worse” since December last year.

Marketing the ‘dream home’, a long-term vision

The concept of the “dream home” is changing – and in some cases disappearing – for consumers facing affordability constraints, the presentation showed.

Thirty-five percent of young singles and couples and about 40% of families report that their definition of a dream home has changed due to current housing market conditions, Sherlock said.

“Especially for many young consumers, affordability is their biggest concern,” she said. “Many feel that achieving home ownership is really difficult and lower their expectations to match that reality.

“This usually means a smaller space, fewer features, maybe a willingness to compromise a bit, whether it’s on location or the style of the home, just to buy.” More than 60% of prospective buyers say they are willing to compromise on these features.

Marketing language needs to change accordingly, says Sherlock.

He emphasized that consumers are processing emotional messages – with half of respondents rating phrases such as “dream home” and “luxury living” as overused and tired.

“Consumers respond not to desire, but to evidence that the message, and more importantly, the product itself, the home, was designed with their issues and priorities in mind,” Sherlock said. “At the end of the day, we expect this trend is likely to continue, given the high rates, high interest rate environment we’re in.

You mentioned it Taylor Morrison’s The “Homes Built for Real Life” campaign is an example of a shift away from aspirational marketing to an effective “content you know” message.

Despite the headwinds ahead, Finnigan offered an optimistic long-term view of the housing market.

Social changes – including young adults delaying home building and marriage – have suppressed family growth for years but may be reversing.

“What the data shows is that these 25-year-old children who choose to live with their parents again, are not stuck there forever,” said Finnigan. “By the time they reach 35, 90% of these people have gone on their own.”

He noted that the largest group of people today is 32 to 38 years old – the age group of first-time home buyers.

“[It will be a] a significant increase in demand for first-time home buyers over the next few years,” Finnigan said.