Experts expect that the American housing market will remain largely stagnant in 2025 due to high interest rates and a limited supply of affordable housing.
A recent J.P. Morgan report projected 3% growth in the cost of American homes this year, as both demand for houses and overall housing inventory remain below historical averages. At the same time, the median cost of a new house in the United States is $250,000 – a figure that 49% of American households cannot afford, according to a report from the National Association of Home Builders (NAHB).
President Donald Trump has argued that by reducing the number of undocumented immigrants in the U.S., demand will decrease and supply will increase – but experts argue that this theory belies several other factors impacting the housing market.
“By reducing immigration and lessening demand, Trump argues that housing costs can be reduced,” said John Sim, the head of Securitized Products Research at J.P. Morgan (JPM), in a statement.
“It’s not that simple, though — approximately 30% of construction workers are immigrants, so there could be complex implications. Cutting immigration would mean cutting labor supply in the construction industry, which could end up exacerbating the lack of affordable housing.”
In addition to the loss of workers, preliminary data from the NAHB indicates that some homebuilders are planning for Trump’s tariffs to add between $7,500 and $10,000 to the construction of new single family homes.
Trump has also expressed opposition to several other strategies that could increase the amount of available housing in the U.S., including building multi-family residences in single-family neighborhoods and bringing more low-income housing developments into the suburbs.
Even in the 15 states seeing the greatest increases in population growth, housing remains stubbornly inaccessible to many Americans. For example, South Carolina, which boasts the lowest housing costs of the fastest-growing states, the median home price is $350,000. In the most expensive of these states, Massachusetts, the median price is $722,425, according to a Realtor.com analysis of U.S. Census Bureau data.
Continue reading to learn the median home price in the country’s 15 fastest-growing states.
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