Increasing demand from new arrivals to the United States is helping to strengthen the housing sector, according to a new report from the Mortgage Bankers Association analyzing the effects of immigration on real estate market trends.
“Immigrants are an important and growing source of demand that has bolstered housing markets in recent decades,” Prof. Dowell Myers, of the University of Southern California’s Population Dynamics Research Group, said in a statement. “Growth in housing demand in recent decades has been more stable among foreign-born than native-born households.”
Homeownership among immigrant households has steadily increased, reaching 2.4 million by 2010, according to the report, and the number is projected to reach 2.8 million by 2020. In the gateway states of California and New York, immigrants account for most of the increase in homeownership rates. New arrivals represented more than 82 percent of the growth in homeownership in the Golden State over the last decade, and more than 65 percent of the increase in the Empire State. These real estate market trends were also pronounced in Illinois, New Jersey, Pennsylvania, Massachusetts, Ohio and Michigan.
Homeownerships rates rise with length of residency, according to the study. Slightly more than 15 percent of Hispanics who arrived in the U.S. in the 1980s were homeowners in 1990. The share rose to nearly 53 percent by 2010, and is expected to exceed 61 percent by 2020. The strong upward mobility of immigrants contributes to these real estate market trends.
A disproportionate share of the nation’s wealthiest citizens is made up of first- and second-generation Americans, according to a recent study from Spectrem’s Millionaire Corner. The most recent Census data shows that 12 percent of all Americans – roughly 36.7 people – were born in another county.
The share climbs to 18 percent among Americans with a net worth of $125 million or more.
These affluent investors are also more likely than the average America to have immigrant parents. More than one-fourth (28 percent) of $125 million plus investors are second-generation Americans. The share shrinks to 11 percent among the general population, according to our $25 Million Plus Investor 2012, which tracks a relatively high level of upward mobility among immigrant families.
“As the housing market continues its recovery, it is important to understand the demographic trends which are likely to impact housing demand in the years ahead,” Michael Fratantoni, executive director of the Mortgage Bankers Association’s Research Institute for Housing America.