Economic Fear Porn

The pressure to keep home prices high is an economic conundrum.

Fortune Magazine reports that a new study from the Federal Reserve Bank of San Francisco suggests that by stopping the tsunami of illegal immigration, President Donald Trump may actually be undermining the restoration of our economy. The report suggests that Joe Biden’s border policies, or total lack thereof, were directly lowering homebuilding prices, increasing housing availability, and boosting the overall economy during his four year administration.

Since 2020 America has not increased housing availability, home ownership or lowered housing costs. The numbers don’t lie. For everyone not in the top 3% income bracket, renting or buying a home is increasingly more difficult.

Their report claims that by putting a stop to the indiscriminate siege across our southern border, Trump is forcing home builders to pay higher wages to a shrinking workforce. That the slower rate of new construction is slowing demand for supply chains and all housing cost more.

If you view the data in a pure supply vs. demand vacuum, it would make sense: Less supply of workers and building supplies in an atmosphere of unrelenting demand will result in higher retail costs to buyers.

Over the next few years we will see if they are right. Trump is only 1 ½ years into his administration, so it’s too soon to tell.

Upon taking office in January 2025, the housing market was in shambles. High interest rates ( 71/2 - 8 1/2% APR) since 2021 and increased loan approval requirements have kept millions out of the home acquisition market. In just in the past 10 years, home prices have increased over 30%.

Post Covid supply lines took years to return to normal. Between 2020 and 2023 builders were over-ordering and storing supplies to assure project completion schedules. Lumber, plumbing, roofing and appliance costs were high and deliveries were uncertain. That resulted in serious supply chain shortages, reduced production capacity and manufacturer consolidation. Even if new home construction could return to 1980’s and 90’s levels, manufacturing capacity would not be able to keep up.

Since 2020 a 25% Inflation rate is stealing the value of the dollar, so sellers want more because they will need more to repurchase another home. The pressure to keep home prices high is an economic conundrum.

The FRBofSF report assumes any recovery of housing supply and demand going forward will be hampered by the “crackdown” on illegal immigration. But that is a faulty assumption. Much of the increase in housing costs has nothing to do with the workforce or the cost of materials. Huge increases in government regulation costs, such as zoning/rezoning fees, environmental studies fees and delays, fire retardant, solar power, water saving and drainage design requirements, all together add millions to the budgets of community infrastructure.

A simple Google search: “National data shows regulatory costs averaged $93,870 per single-family home in 2021, a staggering 44% increase from $65,224 just a decade earlier. For multifamily developments, regulations consume 40.6% of total development costs, with building code changes alone accounting for 11.1% of the final price. (Dec 5, 2025)”

The exponential surge in housing costs since the turn of the century has affected all levels of personal economics. What used to be 25% of a family expense, mortgage or rent, is now often more than 50% of the family monthly cost-of-living expense. When you add up associated costs of ownership, i.e., HOA fees, insurance and property taxes, some folks are spending nearly 65% of their income on their home before they own a car, buy gasoline, pay for cable, internet, cell phone or utilities like natural gas, electricity, and water.

With so little left for food, entertainment, travel or investment, the nation’s economy suffers from minimalist discretionary spending.

So, let’s look at who has been getting screwed. The immigrant population is the service sector, right? The Democrats always say, “We are for the working people: Those that serve us food, clean restrooms and office spaces, do the dirty work of landscape maintenance, road, roof and auto repairs.”

By inviting unvetted, uneducated and untrained immigrants to expand the workforce, who is getting displaced? It’s not the management, the intellectual or professional segment. It’s not the government employees, the healthcare or educational workers. In reality, the immigrants are nothing more than a new age slave population. They are controlled by their illegal status, by their fear of discovery. The millions of undocumented workers in America will not be participating in the housing market other than to fill rooms in massive low income apartment complexes subsidized by government spending. In the meantime, they are filling up hospital emergency rooms, primary schools and daycare centers. They are receiving food and clothing subsidies, and making it harder on all of those who were already here.

Uncontrolled immigration is creating crowded plantations of modern era slaves. So politicians have to transfer more money into plantation population management.

And who pays those subsidies? Taxpayers. And how? Property taxes. Sales taxes. Gasoline taxes. Zoning fees. When basic commodities cost more, they generate higher levels of taxes and fees.

In recent years, huge corporate investment funds ( BlackRock, State Street, Vanguard ) are buying up millions of single family homes. They focus on buying distressed properties sold at foreclosure auctions. Then they turn around and rent them out. To those middle-class families that don’t have $150K or more to put down on a mortgage. What does that do to the average cost of homes for sale? It decreases the supply in an unnatural way, It is part of the corporate strategy: Buy huge inventories of abandoned, upside down mortgages at wholesale prices. Decrease the overall sales supply by converting them to rentals, then sell at a huge markup after amortizing your self-funded mortgage for ten years.

That kind of free market price manipulation is illegal in the financial industry.

I would argue that the Federal Reserve Bank of San Francisco has less than honorable ambitions with their housing market assessment report. It appears Big Finance is trying to provide cover for Big Government from any attempt by Republicans to stop corporations from turning the housing market into another Wall Street Playground.

By ignoring the overall economic mess DJT inherited, ignoring the impact of corporate investing in the housing market, the suffocating burdens of government over-regulation and by assuming legal citizens in America will not be willing to accept wages builders are paying to framers, plumbers, concrete pumpers and electricians on their construction sites, they are spreading economic fear porn.