July 21, 2026 – The Immigration Story

Economic Commentary

With all the focus in the media upon the efforts of the Administration to reduce the population of illegal immigrants, as well as tighten up the borders – there has been little focus in the media upon the effects of the reduction of legal immigration. According to the Cato Institute, the reductions of legal immigration are approximately 2.5 times as large as the reduction of illegal immigration. For example, legal permanent visa issuance has been cut by about 50%. The focus of this column is not to argue whether we should be allowing more immigration, but rather how this reduction might affect the economy as a whole.

The Harvard University Joint Center for Housing Studies has indicated that Census Bureau data shows that the nation’s population growth has slowed sharply and this slower growth is fueled by a reduction in immigration together with lower birth rates. We have already seen evidence of slower population growth within the monthly employment data.  During the past 12 months the economy has added less than 40,000 jobs per month, a significant slowdown over previous years.  What is really telling is that the unemployment rate has not increased significantly. Why?  Because there is less population available to feed employment and unemployment growth.

Turning to the housing market, we have already seen early effects of a stagnant population in the form of the lack of skilled labor available to build new homes – which contributes to rising prices. The term stagnant can also be applied to the concept of mobility as the population has turned stagnant as they reside in their homes for a longer period of time. Looking at the long-term, lower population growth could potentially lead to lower demand for housing, initially for rentals but in the long-run within the purchase sector. This has the potential to wipe out the present housing shortage we have experienced. With the aging of the population and fewer younger people reaching working age, there will be even more pressure upon the social security system. Could these factors lead to a rise in the number of legal immigrants in the future? The possibility is certainly plausible.

Weekly Interest Rate Overview

The Markets. Mortgage rates rose in the past week as hostilities in the Middle East continued. The resumption of the conflict outweighed good inflation news because oil prices rose in reaction to the re-closing of the Strait of Hormuz. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.55% last week from 6.49% the previous week. In addition, 15-year loans also increased to 5.93%. A year ago, 30-year fixed rates averaged 6.75%, 0.20% higher than today. Attributed to Freddie Mac: “Purchase application demand has weakened recently, but housing affordability is more favorable, and housing inventory continues to rise, thus the backdrop for prospective homebuyers is modestly improving.” Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Roughly 3 in 5 U.S. homeowners (59%) are very satisfied with their living situation, compared with 34% of renters. That is according to a survey commissioned by Redfin, and conducted by Ipsos, in May 2026.  Key takeaways from the survey include the fact that homeowners are more likely to love where they live, but overall, most renters report they’re at least somewhat satisfied with their living situation. Homeownership typically provides greater financial security: 62% of homeowners say they can easily afford their monthly housing payments, versus just 29% of renters. In addition, people who own their home also find contentment in putting down roots in their neighborhoods and customizing their houses. Even though homeowners are significantly more likely to love where they live, most renters report overall contentment. Nearly 7 in 10 renters (69%) say they’re either “very satisfied” or “somewhat satisfied” with their current living situation, as do nearly all homeowners (90%). On the flip side, just 5% of homeowners are dissatisfied with their living situation, compared with nearly 1 in 5 renters (18%).  Owning a home allows people to customize their space to their liking, and personalizing a home by decorating, painting, landscaping, or remodeling can foster emotional connections to where you live. Nearly three-quarters (74%) of homeowners say their current home is a reflection of who they are, compared with 46% of renters.  Source: Redfin

The NAR has released a report that examines how the fixed capital gains exclusion interacts with long-term home price growth and homeowner tenure. It documents the current level of capital gains exposure among U.S. homeowners and evaluates how that exposure could change under different price growth scenarios. The purpose is to provide a factual, data-driven assessment of the scale and distribution of exposure and to clarify how it may influence housing mobility and local market conditions. The capital gains exclusion was established in a housing market with lower prices, shorter ownership tenures, and less cumulative appreciation than exists today. Key findings of this report include the fact that filing status plays a significant role in determining when homeowners cross the exclusion threshold and with fixed thresholds, each additional dollar of home price growth expands capital gains exposure.  In addition, capital gains exposure is no longer limited to the highest-cost markets. As home prices rise, more states are seeing a growing share of homeowners approach or exceed the exclusion thresholds.  Capital gains exposure reflects when homeowners bought, not just where they live or how expensive the market appears today. Housing supply depends not only on new construction, but also on the willingness of existing homeowners to move.  Source: The National Association of Realtors

The nation’s housing shortage is often framed as a challenge for first-time buyers and growing families. But another group is increasingly feeling the impact — older homeowners who want to downsize yet find themselves with few practical options. Across the country, many seniors remain in large family homes long after their children have moved away. While aging in place is often portrayed as a lifestyle choice, housing professionals quoted in a Realtor.com article said many older Americans are staying put because moving no longer makes financial sense. “We have quietly created a generation of ‘lonely nests,’” said Wendy Newman, a Northern California–area real estate agent. “Many boomers aren’t choosing to age in place. They’re trapped there economically.”  For decades, downsizing offered retirees a chance to reduce housing expenses while moving closer to family or into a home better suited to their needs. Today, however, many smaller homes, condominiums and townhouses carry price tags that rival or exceed the value of longtime family residences.  As affordability challenges persist, multigenerational living is becoming an increasingly popular alternative. According to the NAR 2026 Home Buyer and Seller Generational Trends Report, 14% of buyers purchased a multigenerational home in 2025.  Redfin reported in March 2025 that nearly one in five Americans now live in multigenerational households.  Source: HousingWire