While the immigration debate rages in Washington, it needs to be pointed out that any new restrictions are likely to impact the new-home sector in a “bigly” way.
Homebuilders are already dealing with a labor shortage, perhaps the No. 1 issue they face -- over and above rising material prices and a lack of buildable home sites. If new immigration is curtailed, and if immigrants already here are deported, the labor problem will be exacerbated greatly.
The result: New houses won’t be built as quickly as they are today, and they may not be built as well, either. If builders have to pay more to find the workers they need to put up their houses, which they most assuredly will, the end product is likely to be even more expensive.
According to the Census Bureau, immigrants now account for almost 1 in 4 workers in the construction field. That’s the highest share ever recorded by the Bureau’s American Community Survey (ACS).
In some states, builders’ reliance on foreign-born workers is even more pronounced. In California and the District of Columbia, 42 percent of the construction workforce comes from abroad. In Texas, it’s 41 percent; in New York and Nevada, 37 percent.
In Georgia, Virginia and Maryland, immigrants account for close to 30 percent of the construction labor force. Interestingly, while immigrants comprise less than 16 percent of the labor force in Virginia, their share in construction exceeds 29 percent. Similarly, in Georgia, less than 14 percent of the labor force is foreign-born, but the share of immigrants in the construction labor force is twice that.
Even though the share of immigrants in construction is now at its highest since the ACS was fully implemented in 2004, and their number exceeds 2.5 million, this is still almost 200,000 fewer than in 2007, according to the National Association of Home Builders (NAHB).
The flow of new immigrants into the construction workforce is also significantly slower than it was in the housing boom years. Fewer than 60,000 new immigrants entered the construction industry in 2015. By comparison, over 130,000 were joining the construction labor force annually in 2004 and 2005.
The rising share of immigrants in construction, says NAHB economist Natalia Siniavskaia, is attributable to “a slow, delayed and reluctant post-recession return of native-born workers.”
Close to 1.7 million native-born workers left the construction labor force during the housing downturn, and the vast majority had not returned to the business as of 2016. That year, the number of native-born workers remained 16 percent below the cyclical high reached a decade earlier.
Homebuyers: Write all the love letters you want to sellers, to try to persuade them you’re the right buyer for their home. But leave your heart-wrenching missive out of the package of documents to give to your lender.
That’s the word from Rob Spinosa, a loan adviser with Supreme Lending in Mill Valley, California, who says some letters contain not-so-flattering information about the house that you probably don’t want underwriters to know. Such as these three examples:
-- “The repairs in the downstairs kitchen don’t concern us. John is good with his hands, and we plan to fix this upon moving in.”
-- “We realize that the home has some deferred maintenance, but we find it charming and are ready for the challenge.”
-- “The termite damage in the report is trivial, in our opinion ... we still love the house!”
Spinosa says he has nothing against love letters per se. He and his wife wrote one themselves when they made an offer on a home. But he and his colleagues remove them from the loan package when they notice them.
Still, he says, “it only takes one oversight from me or anyone on my team before a love letter that may say something (like the above) finds its way in front of an underwriter.”
Lending is not like it used to be, when any applicant who could fog a mirror could get a mortgage. Today, it’s full-bore, full-documentation underwriting. And as Spinosa cautions, “what’s been seen cannot be unseen.”
So go ahead and woo your seller, just don’t let the lender in on the love-fest. Otherwise, you could get the equivalent of a Dear John letter from the lender -- one that says something like, “We’ve found another borrower to love.”
“Alexa, make my mortgage payment.”
Yes, Quicken Loans, the nation’s largest online lender, has developed technology that allows its clients to ask Amazon’s Alexa to make a monthly payment by a secure voice command.
By asking Alexa, clients also can review nearly all account details, such as their current loan balance and payment due dates, and listen to Alexa deliver current interest rates for all of Quicken’s mortgage programs.