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How much did illegal immigration contribute to the recent housing bubble in the USA?
In the past, was there less surplus labor available to the construction industry, because there were fewer illegal immigrants? I wonder if that somewhat limited how extreme the past housing booms could get.
I wonder if the availability of so much cheap labor made over-building possible to a greater extent this latest time.
2 Answers
- One TerabelLv 41 decade agoFavorite Answer
The core of the recent housing crisis is that many people were buying houses on credit they could not truly afford. Because immigrants working for lower wages means that houses are cheaper, this means that a greater number of people were actually able to afford their houses than if wages were higher. So if anything, I'd say that immigrant labor had a weakening effect on the housing bubble.
- simplicitusLv 71 decade ago
The supply side was not a major factor here.
Illegal immigrants could not buy houses so they did not contribute to the demand.
It was the rising demand, coupled with the notion that house prices couldn't fall, that fueled the bubble. It the willingness of the mortgage companies and the banks to lend to almost anyone that fueled demand. And it was low interest rates by the Fed for far too long that also fueled demand and let the bubble grow for far too long.
