American homeowners increasingly comprised of immigrants
Thanks to the successes of immigrants in the working world, many of whom send money to their families back home, they will likely have a heavy influence on homeownership throughout the next several years, a recent report indicates.
According to a joint study conducted by researchers from the Mortgage Bankers Association and the Population Dynamics Research Group at the University of California, homeownership growth among roughly 33 percent of new households will be made up of the immigrant population. In addition, growth in more than one in every four renter households will be comprised of immigrants.
John Pitkin, senior research associate for the PDRG, said that while the report pertains to all immigrants regardless of where they originated from, the largest bloc of buyers will be the Hispanic community.
"For example, among the cohort of Hispanics who arrived in the United States during the 1980s, homeownership rose from just above 15 percent in 1990 to nearly 53 percent in 2010," said Pitkin. "[It] is projected to rise to above 61 percent in 2020 when the cohort will have resided more than 30 years in the United States."
He added that the heightened demand of homes among immigrants is a natural outflow of the pace at which individuals from other countries have come to the U.S., many of whom came seeking a better life for themselves and their family.
The report also detailed the states that would likely garner the most demand from immigrants. Perhaps not surprisingly – given how many immigrants live there – New York and California are likely to represent the states with the highest rates of foreign-born demand. Home owning immigrants already represent a sizable share of property owners in the respective states, comprising 82 percent of the increase in California and 65 percent in New York.
According to the Immigration Policy Center, 10.1 million immigrants live in the Golden State, with roughly four in 10 being naturalized citizens. In New York, more than half of the Empire State's immigrants are have gone through the naturalization process of the 4.2 million who live there.
Four other states where growth is likely to be largely represented by foreign-born citizens include New Jersey, Massachusetts, Connecticut and Michigan, the report said.
Mark Zandi, a nationally recognized economist for Moody's Analytics, indicated that the immigrant population will have a heavy influence on the country's economy, as much of it depends on the real estate sector.
"Immigrants will be key to the housing market for decades to come," said Zandi, USA Today reports.
Cities with highest, lowest vacancy rates
With demand for rental and purchase households picking up, immigrants may find it difficult to find a place that's available, as vacancy rates have diminished. However, there are a number of metropolitan regions where many people have either left or are leaving their homes after they sell them.
The U.S. Census Bureau recently released a list of the 75 cities where vacancy rates are highest. At 4 percent, the city with the largest number of properties available is Bakersfield, California. The Golden State's ninth-largest city is followed by Greensboro, North Carolina at 3.5 percent, Las Vegas at 3.4 percent; Toledo, Ohio at 3.3 percent and the Riverside-San Bernardino, California area at 3.3 percent. Rounding out the top 10 are St. Louis at 3.1 percent, Virginia Beach, New Orleans and Providence, Rhode Island tied at 2.9 percent and Chicago at 2.8 percent.
El Paso, Texas; Springfield, Massachusetts and Rochester, New York are three places where vacancies are few and far between. Each of these metro areas has a vacancy rate of 0.5 percent or less.