Net international migration is a critical component of U.S. population and economic growth and is projected to decline with new restrictions and mass deportations.
Lower population and economic growth have implications not only for real estate demand but also for supply, as fewer construction workers means higher building costs.
Domestic migration has slowed, and, although the “lock-in effect” may be temporary, the direction of state-to-state migration is being shaped by new factors.
“How do immigration restrictions impact real estate? Can’t build. Fewer renters. The spigot has been cut off.”
Less international migration
International migration has been a key component of U.S. population growth. Of the 45 million–person increase in the U.S. population over the past 20 years, 45 percent was due to net international migration. This share has been much larger in recent years, with net international migration accounting for 83 percent of total population gains from 2020 to 2024, and 84 percent of total gains in 2024.
By region, the Southeast has been the largest recipient of net international migration since 2020, at 1.8 million people, followed by 1.7 million in the West and 1.5 million in the Northeast. Half of the Southeast’s 3.6 million-person population gain since the pandemic was due to international migration. In the South Central region, net domestic migration slightly outpaced international migration gains as international migrants represented 39 percent of population gains since 2020.
Less economic growth
Population growth, together with productivity gains, drives economic growth as well as real estate demand. Without net international migration boosting U.S. population growth, the nation faces lower potential output, or gross domestic product (GDP) growth.
Over the 20 years ending in 2024, U.S. real GDP growth averaged 2.1 percent per annum. This two-decade trend exceeds the Congressional Budget Office (CBO) estimate for potential real GDP growth over the next 20 years as immigration restrictions reduce the labor supply. Through 2035, the CBO estimates potential output growth of 2.0 percent per year, with further deceleration to 1.6 percent over the decade ending in 2045.
Potential output growth is estimated using labor force and productivity growth and reflects the achievable growth for the U.S. economy. The labor force outlook is based upon population growth expectations given embedded natural increase, birth rates, and immigration policy. Immigration restrictions have dramatically reduced expectations for labor force growth, which directly reduces potential economic growth. The historical trend of 0.8 percent labor force growth is expected to fall to 0.6 through 2035, then to just 0.2 in the decade ending in 2045.
Declines in the labor force at this scale change the dynamics of the U.S. labor market too. Reducing the labor force shifts the unemployment rate down, even if employment levels are stable. As a result, fewer payroll employment gains are required to maintain a stable unemployment rate. For example, weak payroll job growth of 29,300 jobs per month in the summer of 2025 was enough to keep the unemployment rate at 4.3 percent. Tight labor market conditions are likely to persist with lower net international immigration.
“Restrictive immigration policies are expected to exacerbate labor shortages and affect construction and housing markets.”
Spotlight Demographics, Immigration and Migration Behind Demand
Domestic migration shifts
Within the United States, domestic migration has slowed with fewer out-of-state, and new factors are entering into the mix of decisions in where individuals and families relocate, namely climate change and health care access.
Lock-in effect
Household mobility in 2024 was at its lowest level in 50 years as the homeowner mobility rate hit an all-time low, according to the U.S. Census Bureau. Homeowners are moving less due to the lock-in effect of their existing low rate mortgages combined with higher home prices. The lock-in effect could be corrected with a combination of lower mortgage rates, lower housing costs, and/or stronger economic growth. However, it may be tough to clear the fog in the housing market as construction labor shortages and tariffs on materials increase housing costs.
Climate migration
Over the past 50 years, domestic migration in America has flowed from colder parts of the country to warmer, boosting economic growth in the Sun Belt. Counties with more hot weather days began to experience greater population growth beginning in the 1970s, while counties with more cold weather days had lower, or negative, population growth. This domestic migration trend of flows into the Sun Belt is well-known, especially in the real estate industry.
However, the latest decade (2010 to 2020) tells a new story. Domestic migration is shifting back toward the Snow Belt. In the 2024 national climate assessment, the U.S. Global Change Research Program found that the climate is warming faster than the global average and U.S. winters are warming twice as fast as summer. As a result, the Sun Belt faces an increasing number of extreme heat days, while the Snow Belt has fewer extreme cold days with limited changes to summer weather. A 2024 working paper from the Federal Reserve Bank of San Francisco finds this shifting migration pattern holds across cities and suburbs and across educational groups with moves concentrated among young adults under 30 and older adults near retirement, at 60–69 years of age.
“States removing immigrants will have lower labor supply, leading to lower economic growth.”
Health care access
State-level health care policy was largely irrelevant to domestic migration decisions until the U.S. Supreme Court’s Dobbs decision in June 2022. As of January 2025, 63 million women and girls live in states where their health care is restricted, creating a new consideration for where to live and work.
Legislative bans on a single health care procedure or medication create complex problems for patients and doctors. States with abortion bans require patients in need of such care to suffer unnecessary medical complications, including sterilization and death, or risk arrest for seeking and/or accessing such care. In the first year after the Dobbs decision, the maternal mortality rate in states banning access to health care doubled, while states protecting access to reproductive care saw maternal mortality decline by 21 percent, according to April 2025 research by the Gender Equity Policy Institute. The first year after Dobbs also marked the most pregnancy-related prosecutions since 1973, when the data was first collected by Pregnancy Justice.
Obstetricians, gynecologists, and other reproductive health care professionals now risk prosecution in some states for providing care to their patients. This creates an ethics problem for medical professionals and encourages them to work in locations where providing care is not against the law. As a result, the March of Dimes reports that one in every 25 U.S. obstetric-care units closed in the first year after Dobbs, turning 35 percent of U.S. counties into maternity care deserts as of 2024.
The largest share of college-degree holders in America are women, and they must balance their location decisions against the ability to access health care. Young professionals, who are most likely to consider expanding their families, face this challenge as well. A 2025 working paper from the National Bureau of Economic Research found that 36,000 residents moved out of states with health care bans each quarter since the Dobbs decision. These moves are concentrated among young, single-person households, which is a key demographic for growth in real estate demand.
The combined effects of less migration, lower growth, and new considerations for where to live and work are changing the landscape for real estate demand. Old patterns may not hold, but new opportunities will emerge.
