Reality Check is a Sacramento Bee series holding those in power to account and shining a light on their decisions. Have a suggestion for a future story? Email [email protected]

Reality Check is a Bee series holding officials and organizations accountable and shining a light on their decisions. Have a tip? Email [email protected].

Donald Trump’s campaign says home mortgage costs have soared during the Biden administration, as undocumented immigrantion has caused supplies to tighten.

Mortgage rates and the cost of homeownership have gone up significantly. But there’s no solid evidence to show that illegal immigration has had much, if any impact, on housing supply.

Republican vice presidential candidate JD Vance repeated the assertions during Tuesday’s debate with Democrat Tim Walz.

“We don’t want to blame immigrants for higher housing prices, but we do want to blame Kamala Harris for letting in millions of illegal aliens into this country, which does drive up costs,” said Vance, a U.S. senator from Ohio.

He maintained, “25 million illegal aliens competing with Americans for scarce homes is one of the most significant drivers of home prices in the country. It’s why we have massive increases in home prices that have happened right alongside massive increases in illegal alien populations under Kamala Harris’s leadership.”

Sign up here to get our Election 2024 newsletter, with local, state and national political news and analysis sent right to your inbox.

But is there any truth to those claims?

Experts say undocumented immigrants are not “driving” housing price increases.

Jordan Levine, senior vice president and chief economist at the California Association of Realtors, explained that the population can grow three ways — babies are born, people move from elsewhere in the U.S. or they come to the state from abroad.

In California, domestic migration has been down for years, and newborns far outnumber new immigrants in the state.

“Immigration slowed to a crawl over the past few years and yet price growth accelerated indicating how much of our supply challenges are home grown,” Levine said.

Prices are also up because supply has been down.

The National Association of Realtors has a “Housing Shortage Tracker” that illustrates where supply is most needed.

Several California metropolitan areas , notably in and around San Francisco, Los Angeles and San Diego, were rated as having severe housing shortages in August. The Sacramento, Fresno and San Luis Obispo areas were rated as also having shortages, though less severe.

Nationally, the surge in immigration is helping drive housing demand. A study by Harvard’s Joint Center for Housing Studies found “immigration surged in 2023 to levels not seen in decades,” which the study’s authoris said should help sustain that demand.

The study did not note immigrants’ legal status. But there’s little evidence to support Vance’s claim about undocumented immigrants...

“There isn’t much reason to assume that immigrants without legal status are the main driver behind higher home prices,” said Jacob Channel, senior economist at LendingTree, which tracks interest rates.

“The main driver behind high home prices in the U.S. is a lack of supply, and that supply crunch is largely driven by U.S. born citizens and lawful immigrants who can afford to buy,” he said.

Undocumented immigrants tend to earn lower wages than legal immigrants or natural born citizens, he said, thus making it more difficult for undocumented immigrants to afford homes.

During Tuesday’s debate, Vance cited a Federal Reserve report as his evidence. After the debate, he posted on X an excerpt from a May 3 speech from Fed Governor Michelle Bowman.

“Given the current low inventory of affordable housing, the inflow of new immigrants to some geographic areas could result in upward pressure on rents, as additional housing supply may take time to materialize,” she said. But Bowman did not mention the legal status of immigrants.

Vance also posted two other nonpartisan studies that drew similar conclusions to the Harvard study and to Bowman.

The Trump campaign has been hammering Biden and Harris over housing prices.

“Under Kamala, the average 30-year fixed mortgage rate increased by 120% between 2021 and 2024,” said a Trump War Room tweet last week.

The numbers are accurate. When Biden became president on January 20, 2021, the average 30-year fixed mortgage rate was 2.77%, according to Freddie Mac, which tracks such rates. Last week, the average was 6.08%, or 120% higher than when Biden took office.

Viewed another way, a median-priced monthly home mortgage payment went up 121% from $1,024 in January 2021, to $2,258 in July 2024, according to the National Association of Realtors.

The payment went up not only because of higher rates, but a 37% increase in home prices during that period.

Still, it’s doubtful, say economists, whether any president is solely responsible for higher interest rates.

Rates generally follow the path of the Federal Reserve, which operates independently. The Fed raised interest rates 11 times starting in March 2022, as the rate of inflation was up at its steepest levels in more than 40 years in an effort to cool the economy. It cut rates slightly last month.

There were several reasons prices jumped, among them supply chain problems caused by the Covid pandemic and Russia’s invasion of Ukraine, which drove up oil prices.

The Biden administration had some role in stoking inflation, as its economic recovery legislation pumped more money into the economy, increasing demand.

The Fed operates independently from the president. Chairman Jerome Powell was first nominated to the Federal Reserve Board by President Barack Obama. In 2017, Trump nominated Powell as chairman, and four years later, Biden re-nominated him for another term. He was confirmed each time by strong bipartisan votes.

The Harris campaign cites reports that if Trump wins, rates will go back up, as supporters have suggested they could try to privatize mortgage finance companies Freddie Mac and Fannie Mae.

The Harris campaign cited a 2015 study by economists Jim Parrott and Mark Zandi saying interest rates could go as much as a percentage point higher in that instance..

There’s also a question of how much the spike in rates is affecting homeowners. A report from real estate mortgage broker Redfin found that at the end of August, most homeowners had rates below current levels.

It found 57.4% had a rate below 4% and 22% of homeowners paid at rates less than 3%.

“There’s no evidence to suggest that mortgage costs have increased by anywhere near 90% for most people,” said Channel.

This story was originally published October 2bitstarz, 2024, 3:37 PM.

• says
• bitstarz
• undocumented
• JD
• Vance