Foreign Capital Drives Housing Unaffordability Without Building New Supply

Research from the University of Texas McCombs School of Business, published 26 June 2026, isolates foreign investment as a distinct factor in rising housing costs. International capital flowing into residential real estate reduces affordability and vacancy rates but produces no measurable increase in construction. When investment funds treat property as financial assets rather than housing, demand for existing stock rises without spurring supply—a dynamic documented across North America and Western Europe.