President Joe Biden’s policy of mass migration is forcing up housing inflation, so pushing up interest rates and mortgage rates, according to a report in the Wall Street Journal.
Housing prices should have dropped amid the recent supply of new apartments and homes, but have “not behaved the way we thought it would,” said Austan Goolsbee, president of the Federal Reserve Bank of Chicago..
“I still think it will, but if it doesn’t, we’re going to have a hard time” bringing inflation back down to the target of 2 percent, Goolsbee told the Journal for a May 11 article.
“Some industry executives say, though, that that [new housing] supply is being quickly absorbed because of increased immigration,” the Journal noted.
This migration-driven housing process sucks vast wealth from ordinary Americans and sends it to landlords and housing investors. This process also diverts investment dollars to real estate instead of the machinery, automation, and training that helps ordinary Americans raise their productivity and their wages.
Goolsbee’s comments were echoed by Neel Kashkari, president of the Federal Reserve Bank of Minneapolis. “While the long-run effect of increased immigration on inflation [and interest rates] is unclear … [immigrants’] arrival in the U.S. has likely also increased demand for housing,” Kashkari said on May 7.
Since 2021, Biden and his deputies have imported more than 10 million legal, illegal, and quasi-legal migrants via a growing variety of routes. The inflow has been so large that it delivered roughly one migrant for every American child born during Biden’s tenure. This sudden government-driven population expansion has created a consumer “demand shock” — and an economic boom for retailers, landowners, and the food industry.
“There’s been just a whole lot more demand than most people expected,” Ric Campo, the CEO of Camden Property Trust, a Texas housing company with 58,000 apartments and homes, told the Wall Street Journal.
The bankers’ views are important because they — and other Federal Reserve bankers — are responsible for curbing the inflation that has spiked in Biden’s administration.
The Federal Reserve’s appointees are now trying to lower inflation by raising interest rates to slow the overall economy. Since, early 2022, the Federal Reserve has pushed interest rates up from one-quarter of a percent to 5.5 percent. In lockstep, the new mortgage rates paid by homeowners — and by landlords and their renters — have climbed from 2.7 percent in December 2020 to 7 percent in May 2023.
The campaign to reverse Biden’s migration-caused inflation is imposing a huge cost on younger Americans. For example, according to MoneyUnder30:
A 1% difference between a $200,000 home with a $160,000 mortgage increases your monthly payment by almost $100. Although the difference in monthly payment may not seem that extreme, the 1% higher rate means you’ll pay approximately $30,000 more in interest over the 30-year term. Ouch!
The extra payments are diverted to the older investors who were lucky enough to buy homes and stocks decades ago.
This immigration-driven process is increasingly recognized as it shifts housing wealth from Americans’ children to their parents, and from millennials to Boomers.
Breitbart News reported on May 6 that younger U.S. workers are losing hope of ever buying homes amid Biden’s massive inflow of migrants:
Pessimism among renters about the ability to ever own a home is worsening, with the expectations of someday owning a home falling to a new all-time low, a survey released Monday by the Federal Reserve Bank of New York showed.
The average probability of buying a home, according to renters in the New York Fed’s Survey of Consumer Expectations, fell to 40.1 percent. That’s down from 44.4 percent a year ago and the lowest in records stretching back a decade.
The transfer of investment dollars from workplaces to housing may also have a huge impact on Americans’ ability to become more productive at work. For example, Larry Fink, the founder of the $10 trillion BlackRock investment fund, said at a pro-globalist April 29 event hosted by the World Economic Forum in Saudi Arabia:
That’s something that most people never talked about. We always used to think [a] shrinking population is a cause for negative [economic] growth. But in my conversations with the leadership of these large, developed countries [such as China, and Japan] that … don’t allow anybody to come in — [so they have] shrinking demographics — these countries will rapidly develop robotics and AI and technology …
If a promise of all that transforms productivity, which most of us think it will [emphasis added] — we’ll be able to elevate the standard living in countries, the standard of living for individuals, even with shrinking populations … The social problems that [we] will have in substituting humans [in some jobs] is going to be far easier in those countries that have declining populations.
Migration also cuts the wages and salaries that Americans need to pay for more expensive homes.
“Abundant labor coming across the border” is reducing the wages paid to American employees, Kristalina Georgieva, managing director of the International Monetary Fund, said at an April 2024 meeting.
