Immigrants, Minorities Represent Key To Future Housing Demand
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 PatternsHere are a few highlights taken directly from the Harvard study:
[sidebar] Top 10 States For Foreign-Born HomebuyersAlmost 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:
Source: Joint Center for Housing Studies of Harvard University