According to a new study, rental and house ownership are expected to grow through 2020 as new U.S. citizens will generate 36 percent of the demand for U.S. homes. The report, “Immigrant Contributions to Housing Demand in the United States: A Comparison of Recent Decades and Projections to 2020 for the States and Nation,” was sponsored by the Mortgage Bankers Association’s Research Institute for Housing America (RIHA) and prepared by the Population Dynamics Research Group at the University of Southern California School of Policy, Planning and Development.
Immigrant buyers filled a large gap in the last decade as the number of U.S. homebuyers declined. According to USA Today, immigrants will generate 36 percent of the increased demand, but this number is down because of the growing demand for homes from native-born buyers. Foreign-born buyers will account for the majority of growth in states such as New York, California, New Jersey, Massachusetts, Connecticut and Michigan.
Although the share of the demand from immigrants has technically decreased, economist Mark Zandi told USA Today that they will play a major role in the success of the housing market. Between 2010 and 2020, immigrants will account for 32.3 percent of growth in all households, according to the report’s projections. However, foreign-born renter households have been on the decline since 1990 and are expected to continually fall over the next decade.
“As the housing market continues its recovery, it is important to understand the demographic trends which are likely to impact housing demand in the years ahead,” said Michael Fratantoni, executive director of RIHA. “This study provides information for lenders, builders and policymakers regarding the future shape of housing demand, which the authors clearly show will be substantially impacted by the housing choices of foreign-born households, whether they are renters or homeowners.”