New Jersey Real Estate Report

From FactCheck.org:

Vance’s Misleading Claims on Housing Prices and Illegal Immigration

Vice President JD Vance has exaggerated the increase in home prices during President Joe Biden’s time in office and has misleadingly pointed to illegal immigration as a primary cause of a rise in prices.

In a Fox News interview on Nov. 13, Vance said that “the price of a new home literally doubled” under Biden. But home sales price measures show at most a 37% increase. Vance appears to be referring to an increase in the monthly cost of new homes, an increase that factors in a rise in mortgage rates.  

In that interview and in a Dec. 2 Cabinet meeting, Vance pointed to illegal immigration as a primary cause. “Why did homes get so unaffordable?” he said in the Cabinet meeting. “Because we had 20 million illegal aliens in this country taking homes that ought by right to go to American citizens,” he said, using an exaggerated figure.
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According to federal data, home prices increased during the Biden administration, but not nearly as much as Vance claimed. The Census Bureau and Department of Housing and Urban Development data show there was a 21.1% increase in the median sales price of new homes, rising from $354,800 in January 2021 to $429,600 in January 2025. 

The National Association of Realtors’ seasonally adjusted annual sales figures show a similar trend for existing single-family homes. In 2024, the national median price was $412,500, a 37.4% increase from 2020, the year before Biden took office.
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“There are a couple of things going on,” Vigdor said. “Demographically, birth rates are falling and the population is aging, which will naturally reduce the number of young families looking to purchase a home. That softens the demand side.” He added that “buyers may also be waiting for interest rates to come down, or for macroeconomic uncertainty associated with tariffs and other Trump administration initiatives to resolve.”
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“I reported that every immigrant entering a local housing market, which I defined as a county, raises home values by about 11.6 cents,” Vigdor, who released a study in 2013 examining the link between immigration and housing prices, explained in an email. Using the Pew Research Center estimate for the unauthorized population, Vigdor estimated “32,000 unauthorized immigrants in the ‘typical’ American housing market, which suggests a boost to home values of under $4,000, or less than 1% of the current median sales price in the US.”

Steven A. Camarota, director of research for the Center for Immigration Studies, a think tank that supports lower levels of immigration, said in September 2024 testimony to Congress that immigration was driving an increase in demand for rental housing. His analysis, he said, “indicates that a 5-percentage point increase in the recent immigrant share of a metro area’s population is associated with a 12 percent increase in the average U.S.-born household’s rent, relative to their income.” He noted that this was “only a simple correlation and does not include homeowners. Much more detailed analysis would be necessary to confirm this relationship.”

Other experts acknowledge that immigration overall plays a role in the supply and demand of housing, but they also point to larger factors driving home prices in recent years. 
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Mark Zandi, chief economist of Moody’s Analytics, also pushed back against Vance’s assertions. “It is misplaced to blame immigration for the runup in house prices since the pandemic,” he told us in an email, noting that “[m]ost new immigrants rent” and the construction industry is “more dependent” than any other “on immigrant workers.”

Frost’s analysis also said that immigrants are strong contributors to the housing supply side as they accounted for 34% of construction trade jobs in 2023, based on Census data.

“The recent flat house prices are unrelated to less immigration, as immigrants generally don’t own homes,” said Zandi, whose work was frequently referenced by the Biden administration. “However, affordability remains a problem given high mortgage rates and the previous runup in house prices, rising homeowner insurance rates, and property taxes.”

From Newsweek:

How US home sales are predicted to rise across 2026

Redfin believes that 2026 will be the year of a “Great Housing Reset.” A gradual increase in affordability will release buyers from the sidelines of the U.S. housing market, encouraging more transactions.

This process won’t happen overnight but will be “yearslong,” Redfin said. Income will rise faster than home prices “for a prolonged period of time for the first time since the Great Recession era,” the real estate brokerage wrote. Home prices will stabilize rather than decline, leading to a “long, slow recovery” in affordability nationwide.

Redfin expects the median U.S. home-sale price to rise 1 percent year-over-year through 2026, a slow growth due to the fact that demand will remain hindered by a “weaker economy” and “still-high mortgage rates and prices.”

This smaller price growth, combined with dipping mortgage rates, will also contribute to lower monthly housing payments growing more slowly than wages.

Redfin predicts that sales of existing homes will end 2026 up 3 percent from 2025, with sales coming in at an annualized rate of 4.2 million.

The improvement in affordability, driven by wages growing faster than home prices next year, will get some buyers off the sidelines, but many will stay there.

Homeownership will remain out of reach for many Gen Zers and young families across the country, Redfin said, who will explore non-traditional living situations to afford housing, including living with their parents and with roommates and delaying having children.

From Newsweek:

Price Correction ‘Worse Than 2008’ Coming To US Housing Market—Analyst

The only transactions that continued happening in the U.S. market at volume this spring and summer, she said, were for higher-priced homes. “You have this bifurcated housing market, but the majority of folks transacting are in these upper tiers, so your median [home price] is going to be higher,” Wright said.

“However, what I’ve been seeing over the last three months, and this is—I get into the dirty dirty details—underneath the covers, that $100,000-$250,000 sales price, we are starting to see incremental increases in sales in that category,” she added.

“And so as it continues, it will start to drag the median down. It’s happening already and that’s where we’re seeing the deceleration,” Wright said, adding that we are going to end the year with “flat” home price growth.

Steeper cuts will come later, she warned. “It’s going to be worse,” she said, when asked to make a prediction about 2026. 

Wright is expecting a big drop in home prices next year, as investors who are not making money from their properties withdraw from the market.

“What happened last time was, we were on our way down to where household median income would actually match home median prices, but we never got there because Wall Street came in to buy those [homes],” Wright said. 

“But now they’re crying on TV,” she said, adding that some investors are claiming they were asked by government-backed mortgage agencies to intervene and purchase those properties. 

“They’re going to start crying a lot louder soon and say, ‘Hey, we saved you, government.’ And so, who’s the buyer now?” Wright said she fears the government might be forced to step in as “the buyer of last resort.”

Another fear Wright has is about the quality of the homes that investors are likely going to be leaving behind. “In the last cycle, remember how many all-cash buyers we’ve had? When these are not on a bank’s balance sheet, there’s nobody that’s going to be cutting the grass, there’s nobody that’s going to be winterizing that home, taking care of the mold problem,” she added.

“And so I think we could see this kind of devolve into chaos a lot faster than we did last time as many investors abandon these properties.”

Wright then said that next year home prices might correct to the point where they match the median household income. In 2024, according to data from the U.S. Census, that median was $83,730.

That is going to be a price decline “near your 50 percent,” she said. “And much greater in certain areas.”