The impact immigrants have on U.S. real estate is growing, as 13 percent of the nation’s population—about 42 million people—hails from foreign countries, according to the National Conference of State Legislatures. “Immigrants are a big driving force for housing markets across the nation,” Kusum Mundra, an economics professor at Rutgers University in Newark, N.J., told realtor.com®. “Most want the American dream, which is to own a home.”
But the road to homeownership for immigrants can be challenging. It takes an average of five to 10 years for immigrants to be able to purchase a home after arriving in the U.S., says Gary Painter, director of social policy at the University of Southern California’s Sol Price Center for Social Innovation. In 2016, about 40.7 percent of immigrants were homeowners compared to 66.1 percent of native-born Americans, according to a realtor.com® analysis. “Just like those born in the U.S., [immigrants] view home buying as putting down roots in the community,” Painter says. “On average, where immigrants are settling, property values have gone up.”
Many immigrants choose to settle in struggling cities that have lost jobs or residents, such as the Rust Belt, because they offer cheaper housing. Immigrants move in and may start businesses, which helps buoy those housing markets. “There are cities that were on the way down, and immigrants have revived them,” says George Masnick, senior research associate at Harvard University’s Joint Center for Housing Studies. “They’re buying houses; they’re going to be the ones who keep the local economy vibrant.”
Economists point to Detroit as an example where this is occurring. The Detroit area’s population has plunged nearly 63 percent since its peak of 1.8 million residents in 1950. But since 1985, the city has become attracted a large percentages of Middle Eastern immigrants, according to realtor.com®. “People come into neighborhoods and buy houses that maybe were not kept up, and they fix them up and attract other people like themselves to the areas,” says Dawud Walid, executive director of the Michigan chapter of the Council on American-Islamic Relations.
The following metros have the highest percentage of immigrant residents, according to realtor.com®:
- San Jose, Calif.
- Los Angeles
- San Francisco
- New York
- McAllen, Texas
- Washington, D.C.
Source: “How Immigrants Are Transforming the American Dream – and Real Estate Along With It,” realtor.com® (Sept. 11, 2017)