Homeownership and rental demand of foreign-born households will continue to increase as growing numbers of immigrants settle longer in the United States, according to a new report sponsored by the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).
The report attempts to calculate the growth in homeowner and renter households headed by immigrants in the states and regions of the nation through 2020. The report was prepared academics at the University of Southern California School of Policy, Planning, and Development and sponsored by RIHA.
The report project that the number of foreign-born homeowners will increase more rapidly over the coming decade. The number of new foreign-born homeowners rose from 0.8 million 1980-1990, to 2.1 million added in 1990-2000, to 2.4 million added in 2000-2010, and is projected to rise further to 2.8 million in growth in the current decade (2010-2020).
Foreign-born ownership demand comprised the majority of all growth in homeownership in Massachusetts and seven other states from 2000 to 2010, with established gateway states of California and New York leading the pack. In California, 82.2 percent of growth in homeownership was attributed to immigrants, and 65.1 percent in New York.
Between 2010 and 2020, immigrants nationwide are projected to account for 32.2 percent of the growth in all households, including 35.7 percent growth in homeowners and 26.4 percent growth in renter households.
However, the overall share of immigrant-owned homes will likely decrease, since homeownership among native born Americans is projected to grow more strongly between 2010 and 2020.
"Immigrants are an important and growing source of demand that has bolstered housing markets in recent decades," Professor Dowell Myers, one of the report’s authors, said in a statement. "Growth in housing demand in recent decades has been more stable among foreign-born than native-born households. This is because increases in native-born demand have been subject to large swings in the size of cohorts reaching ages 25 to 34, the most common age of entry to the housing market. In contrast, inflows of new immigrants have not varied widely in recent decades, and in addition the strong upward mobility of prior immigrants, has led to continued increases in aggregate demand for home ownership."
"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, RIHA’s executive director, said in a statement. "This study provides information for lenders, builders, and policymakers regarding the future shape of housing demand, which the authors clearly show will be substantially impacted by the housing choices of foreign-born households, whether they are renters or homeowners."
