A married couple in their late twenties, both working, cannot buy a house in the city where they grew up. That is the ordinary American housing story now, and immigration is a central cause of it.
Housing is close to a fixed supply in the short run, and mass immigration is a demand shock aimed directly at it.
The Arithmetic
A city cannot add housing quickly. In the metros where the jobs are, builders often cannot add much at all, because the land is taken and the zoning is tight. Supply moves slowly and, in the places people actually want to live, barely moves.
Demand is a different story. Since 1990 the United States has added roughly 32 million foreign-born residents, and about 80% of them settled into 20 metropolitan areas.[1] Those are the same metros where housing was already scarcest. Millions of new households arrive every few years and need somewhere to live, and they compete for the existing stock alongside the Americans already bidding on it.
Put a large, steady increase in demand against a supply that cannot keep up, and price is the only thing left to move, and it moves up. That is the arithmetic of any scarce good when buyers are added faster than supply, and it has nothing to do with the immigrants themselves.
The result shows up in a single ratio. In 1990 the median American home cost about three times a year's household income. By 2024 it cost 5.6 times, as the price ran from roughly $96,000 to $400,000 while incomes lagged well behind.[5]
Cost of a U.S. home, relative to income
A home costs five years of income now, and more where immigration concentrated
Nationally a median home ran about 4x median household income through the 1990s and about 5x today. Across the 109 metros over 500,000 people the ratio rises with a metro's foreign-born share: 3.2x under 5% foreign-born, 4.0x between 5 and 10%, and 5.2x above 10%.
By year, nationally
Median sale price divided by median household income. It held near 4x through the 1990s, then stepped up after 2000 and has not come back down.
By a metro's immigrant share
Across all 109 U.S. metros over 500,000 people, the more foreign-born a metro, the higher its home price-to-income ratio.
By year: median sales price of houses sold (U.S. Census Bureau and HUD, FRED series MSPUS, annual average of the four quarters) divided by median household income (Census Current Population Survey). One consistent basis across every point from 1975 to 2024; nothing is spliced. FRED's income series begins in 1984, so the 1975 and 1980 points are taken from Census Table H-6, which carries the same household series back to 1975. That is as far back as it goes: earlier years exist only for family income, a different and lower basis. By metro: American Community Survey 2024 one-year estimates, median home VALUE divided by median household income across all 109 metros over 500,000 people. Value-based ratios run about a point below sale-price ratios, so a metro reading 5.2x is not directly comparable with the national 5.0x above it.
Who Pays
The people who lose a bidding war are the ones with the least to bid, which means the young and the first-time buyer.
Homeownership among American households under 35 has fallen to about 37%.[2] The rest are renting. In those same metros, rents rose alongside prices, so income that could have gone toward a down payment goes to rent instead. Wages are decent, but prices and rents in the job centers rise faster than a renter can save. Nationwide, the homeownership rate slid to 63.1% by 2020, the lowest since 1970 and the steepest decade decline since the 1930s.[3]
This is not hostility to newcomers. The government keeps directing new arrivals into the same handful of cities, and American families are left competing for the one thing every household needs against a population the policy chose to add.
The Record
The national homeownership rate traces the same pattern for a century. Through the 1890-1924 wave, fewer than half of American households owned their home, and the rate bottomed at 43.6% in 1940.[3] The 1924 Act cut admissions by about 80%, the foreign-born share fell to 4.7% by 1970,[4] and homeownership climbed to 55% by 1950, 61.9% by 1960, and 64.4% by 1980.[3] After the 1990 Act reopened mass immigration, the rate stalled and slid back toward the low 60s.
U.S. homeownership rate, 1900-2024
Homeownership climbed during the pause. Young buyers were left behind.
Homeownership rose almost 21 points between 1940 and 1980, from 43.6% to 64.4%, and the whole of that climb sits inside the era of restricted immigration. It has moved barely two points in the 45 years since, and not at all since the 1990 Act.
Source: U.S. Census Bureau, Historical Census of Housing, homeownership rates, 1900-2020, with the 2024 rate from the Housing Vacancies and Homeownership survey.
That national number is a poor guide to what is happening, because it is held up by older Americans who bought decades ago and never sold. Someone who closed on a house in 1985 is still counted as an owner today. The squeeze lands on the young. Americans under 35 own at about 37%, far below where their parents stood at the same age.[2] A 55-year-old is not the one being priced out. Their children are.
A clean comparison with the pre-1924 decades is not possible, because mortgage lending and homebuilding have changed since then. What is genuinely new is the concentration. About 80% of the 32 million immigrants added since 1990 settled into the same 20 metros where the jobs are.[1] A young couple in San Jose or Miami is now bidding for a first home against a population the country chose to add, in the exact cities they need to live in for work. Their parents and grandparents did not face a demand increase of that size in those places. That is the part of the housing story that has shifted from one generation to the next.
Why the Usual Fixes Fail
Every few years Washington proposes to help first-time buyers: a tax credit, a down-payment grant, a subsidized rate. Each one puts more money into the hands of buyers who are all chasing the same limited set of houses. More money bidding on the same stock does not lower the price; it raises it, and the subsidy ends up in the seller's pocket.
There is only one way to actually reduce the pressure, and it is to reduce the number of bidders. That is a policy the federal government controls directly, and only the federal government controls it. It sets how many people are admitted.
Recommendations
Housing demand driven by immigration can only be cut at the source. Supply reform helps, but no city can build fast enough to house a million-plus new arrivals a year and still bring prices down.
- Replace the 1990 Immigration Act and set annual admissions near 200,000, roughly the pre-1965 level and a cut of at least 50% from where the numbers sit now.
- End illegal entry in practice, not just on paper, so the housing market is not absorbing an unmeasured inflow on top of the legal one.
- Stop subsidizing demand. First-time-buyer credits and down-payment grants raise prices in the supply-constrained metros, and the money ends up with sellers, not buyers.
- Judge the policy by whether a young family can buy a first home, not by aggregate growth statistics that can rise while ordinary families are priced out.
Homeownership was within reach when demand grew slowly, and it slipped away when the country reopened the inflow. The same lever that produced four decades of rising homeownership after 1924, an 80% cut in admissions, remains available to Congress.
Sources
- Migration Policy Institute, U.S. Immigrant Population by Metropolitan Area - roughly 32 million foreign-born added since 1990; about 80% settled into 20 metropolitan areas
- U.S. Census Bureau, Housing Vacancies and Homeownership (CPS/HVS), homeownership rates by age of householder - homeownership for householders under 35 about 37%
- U.S. Census Bureau, Historical Census of Housing: Homeownership Rates and 2020 Census, Housing Characteristics: 2020 - homeownership 43.6% (1940 low), 64.4% (1980), 63.1% (2020)
- U.S. Census Bureau, Historical Census Statistics on the Foreign-Born Population: 1850-2000 - foreign-born share fell to 4.7% in 1970
- Harvard Joint Center for Housing Studies, Home Price-to-Income Ratio Reaches Record High and Demographia International Housing Affordability 2024 - national home price-to-income ratio 3.0x (1990) to 5.6x (2024); median home price about $96,000 to about $400,000