Foreign-born residents account for more than a third of America’s net household growth, while Hispanics are easily the ‘majority minority.’

At street level, the housing market continues to look weaker every day. But the demographic underpinnings for long-term housing demand remain solid, says a recent Harvard University study, with immigrants and Hispanics in particular playing a key role in fueling that demand in the years ahead.

“After contributing more than a third of net household growth between 1995 and 2005,” says the university’s Joint Center for Housing Studies report issued last summer, “new immigrants will likely account for at least that large a share between 2005 and 2015. The children of immigrants born in the United States will also add significantly to household growth.”

As a result, household growth is expected to increase 14.6 million between 2005 to 2015 - about 2 million greater than the numbers reached between 1995 and 2005. Hispanics alone will contribute 35 percent of this projected growth.

“Hispanics will, therefore, have a major presence in markets for starter homes, first trade-up homes and entry-level apartments,” the study says.

“Housing demand” in terms of this study lumps home buying and apartment renting together. However, the foreign-born represented 14 percent of homebuyers in 2005, with significantly larger numbers in specific parts of the country.

“Overall immigration is on course to hit a record-setting 12 million between 2005 and 2015,” the study says. “While still concentrated in a handful of gateway metros, immigrant households are beginning to settle in a growing number of locations across the country.”

In California, New York, New Jersey and Florida, at least 20 percent of recent homebuyers are foreign-born. But even in smaller states not considered traditional immigrant mainstays, such as Connecticut, Maryland and Rhode Island, immigrants still account for at least 14 percent of recent homebuyers (see below “Top 10 States For Foreign-Born Homebuyers”).

Naturally, immigration gains mean minorities account for an increasing share of the country’s overall household growth. For example, minorities account for nearly all the net growth in households in the Northeast since 1996. Although minorities account for the least amount of growth in the Midwest, they still made up half of the net gain in the region’s households between 1996 and 2006.

Hispanics are easily the “majority minority.” Hispanic household growth has added 40 percent of net new household growth in the Northeast and the West. While such gains would be expected in big cities, the number of Hispanics in rural areas nearly doubled between 1990 and 2004.

Hispanics also contribute large shares throughout demographic age groups. They account for 20 percent of the echo boomers - those born between 1985 and 2004. Net growth in the number of minority household heads aged 40-49 should reach 1.4 million in 2015, with Hispanics making up 1.1 million.

[sidebar] Keeping Up With The Garcias?

In 2000, the most common last names for U.S. homebuyers were Smith, Johnson, Brown, Williams and Miller, according to DataQuick Information Systems, which analyzed deeds and country assessment information throughout the country.

Five years later, Garcia and Rodriquez bumped Brown and Miller from the list.

[sidebar] Immigration Population Patterns

Here are a few highlights taken directly from the Harvard study:

The number of legal immigrants has reached nearly 1 million per year, while the net growth in illegal immigrants is conservatively estimated between 300,000 and 500,000 per year. Net immigration has averaged 1.2 million annually since 2000.

 

The Department of Homeland Security estimates that 10.5 million illegal immigrants lived in the United States in 2005. Even if net growth in illegal immigration were cut in half, U.S. household growth would be at most 5 percent lower. Newly arrived legal immigrants are expected to contribute about 3.6 million households to total projected growth over the decade.

 

Between 2000 and 2005, immigration prevented outright population losses in Illinois, New Jersey and Indiana, while limiting declines in New York, Pennsylvania, Massachusetts and Michigan. In large metro areas, such as New York City, Chicago, Boston and Minneapolis, population levels would have fallen in the 1990s without immigrants.

 

Some of the most rapid growth rates in immigrant populations have occurred outside of metro areas. Between 2000 and 2004, immigrants accounted for 31 percent of net population growth in rural areas and even larger shares in resort communities in the West and major agricultural and manufacturing areas in the South and Midwest.

 

Three decades ago, most immigrants as well as second-generation Americans were considerably older than these groups represent today. One out of every five people between 25 and 34 are now foreign-born, and another 9 percent are second-generation Americans. In addition, 25 percent of children under 10 have foreign-born parents.

 

Immigrants are also a critical resource for housing production. In California, Texas and Arizona, the foreign-born share of the construction labor force exceeds 38 percent. And in states without as much immigration growth, such as North Carolina and Colorado, immigrants still make up 25 percent of construction labor.

[sidebar] Top 10 States For Foreign-Born Homebuyers

Almost 14 percent of U.S. homebuyers in 2005 were born elsewhere, according to the Harvard study. Here are the 10 states with the most foreign-born homeowners for 2005:
California......31%
Hawaii .....24%
New Jersey.....24%
New York.....22%
Nevada.....21%
Florida .....20%
Texas.....18%
Illinois .....18%
Massachusetts.....17%
Maryland.....16%
Source: Joint Center for Housing Studies of Harvard University