Foreign funds help make housing unaffordable: research

Research from the McCombs School of Business identifies foreign investment as a significant factor in rising U.S. housing costs, with neighborhoods attracting foreign buyers experiencing 6.7% higher prices while housing supply grew only 1%. Beyond foreign capital, the study finds that housing supply has become far less responsive to price increases nationwide—growing just 0.26% for every 1% price increase from 2009-2018—due to restrictive municipal zoning and permitting rules that vary dramatically by city. The research emphasizes that cities control much of their housing supply sensitivity through local policies, and reforming these regulations is critical to addressing affordability as more people move back into urban areas.