Immigrants Continue to Shape Housing Market
Demand for real estate in the U.S. housing market will accelerate in the next decade as immigrants, whose status has been hotly debated in both parties’ presidential campaigns and in Congress, look for homes.
That’s good news for the real estate and home mortgage industries, at least according a study by Harvard University’s Joint Center for Housing Studies in Cambridge, Mass.
“Immigration has undergirded the housing market, and it’s now reaching a size and scale where it’s beginning to shape the market,” said Nicolas Retsinas, director of the Harvard center, in an interview.
The rate of household formation is expected to average 200,000 more a year over the next decade than the last, the study said.
An increase in household formation will “put a floor under how weak this housing market can get,” predicted Michael Darda, chief economist at MKM Partners in Greenwich, Conn.
In addition, immigrant home purchases will support demand as lenders impose stricter standards after a surge in bad credit mortgage defaults.
BY THE NUMBERS
- 1.46 million: New households, a key indicator of real estate demand, expected to be formed every year for the next decade.
- 1.26 million: New households formed each year from 1995 to 2005.
- 20 percent: Minimum share of recent home buyers in California, New York, New Jersey and Florida who are foreign-born.
- Four of top 10: Portion of real estate deeds with Hispanic surnames; in California the top five surnames are Hispanic.
- One out of five: Portion of U.S. residents age 25-34 who are foreign-born. The age group is the primary source of household formation.
- 1.2 million: Annual legal and illegal immigration to the United States since 2000.
SOURCE: Bloomberg News