Report: Immigrants Key Home Buyers in Driving Growth

Originally published by: Urban Land InstituteApril 11, 2017

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Over the past two decades, immigrants account­ed for about 28 percent of all household growth in the United States and have been a critical factor in the housing market’s recent recovery. Immigration policy is poised potentially to have a big impact on the continued improvement and overall health of the U.S. housing market.

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A new study by the ULI Terwilliger Center for Housing builds off prior research on immigrants and housing to examine the housing and residential location choices of immigrants in five metropolitan areas that each reflect a different type of immigrant gateway community: San Francisco; Houston; Minneapolis; Buffalo, New York; and Charlotte, North Carolina.

Immigration has been an important source of population growth and housing demand in these regions. Without growth of the foreign-born population, regions with strong housing markets, like San Francisco, would not have recovered so quickly after the Great Recession and regions that are still struggling in the aftermath of the downturn, like Buffalo, would have seen even weaker growth. Overall, recent immigration to these metro areas has had a positive effect on local housing markets.

This study—based on an analysis of data from the American Community Survey and a suburban typology developed by RCLCO and ULI—shows that demand for homeownership remains strong among the foreign-born population and that rates of homeownership depend on household income and length of tie in the country. In San Francisco, Houston, and Buffalo, the homeownership rate among immigrants who have been in the country since at least 2006 is similar to that of the native-born population.

For developers and homebuilders, this research suggests that immigrants represent a significant portion of housing demand. Shifts in the characteristics of immigrants suggest growing demand for single-family, for-sale homes, including both new construction and existing homes in established high-end and stable middle-income suburbs.

For local officials and advocates, our research suggests that areas experiencing significant growth in their immigrant population should be planning for ways to accommodate new residents to benefit from their contributions not only to the local housing market, but also to local economic growth.

For anyone involved in promoting healthy and sustainable communities, our analysis highlights the potential for proposed federal immigration policy to adversely affect local housing markets. As this report suggests, without sustained immigration flows, there is a risk of a weaker U.S. housing market, with the bottom falling out of some markets in the nascent stages of recovery. The demand for homeownership and for single-family housing, as well as the continued growth of both urban and suburban communities throughout the country, will depend on the trajectory of U.S. immigration policy.


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