One Key to Economic Development
Today, immigrants play an important role in economic growth across the United States where they start businesses and hire workers. Immigrant workers supply the labor market at all skill levels. They also make up a signiﬁcant portion of home sales and constitute one of the fastest growing segments of the housing market.
In addition to economic opportunities, immigrants are attracted to the U.S.’s strong, legal protection of personal property rights. In other countries, home-owners’ rights may not be codiﬁed and, depending on the political climate, can wax and wane. In the U.S., homeowners can be assured that, if they buy property, their rights to it are protected.
Foreign-born buyers drive growth.
Most immigrants have a strong desire to own their own home. The longer an immigrant stays in the U.S., the more likely it is that they will purchase property. In fact, the rate of foreign-born homeownership has been trending up for many years, while the homeownership rate for native-born residents has been trending downward.
Immigrants make up a signiﬁcant portion of domestic home sales, especially in the ﬁrst-time buyer’s market. According to Harvard University’s Joint Center for Housing Studies they account for about 10 percent of home sales in the U.S. and about 15 percent of ﬁrst-time buyers. In a number of cities, they are the difference between a stable market and one in distress.
Even more important is that immigrants are driving growth in the housing market. Between 2000 and 2012, foreign-born buyers accounted for about 40 percent of market growth in the U.S. while only representing 13 percent of the population. They are the fastest growing segment of American buyers according to a study done by the Mortgage Bankers Association. Though this is particularly true in areas that have traditionally served as gateways, including California and New York, immigrants are also important in newer U.S. destinations such as Georgia and North Carolina.
Rebuilding distressed markets
Immigrants are often ﬁrst-time homebuyers who look for bargain properties in which they can invest sweat equity. Neighborhoods rampant with foreclosures and bottomed-out prices have become attractive investments. In many cities hard hit by the economic downturn, foreign-born buyers are ﬁnding value and preventing further market declines.
A report on immigrants’ effects on local economies by Partnership for a New American Economy concludes “immigrants can simultaneously boost housing prices in some areas while easing housing affordability problems elsewhere,” because many gravitate to affordable neighborhoods and revitalize areas in decline. The same report quantiﬁes the effect of immigrants on median home values by U.S. county for the period 2000 to 2010. Their interactive map, available atrenewoureconomy.org/housingmap, makes it easy to view these impacts across the U.S.
Immigrants not only raise home prices through increasing demand, they also attract more native-born residents to the same areas. An Americas Society/Council of the Americas research report found that for every 1,000 immigrants moving to a county, 250 U.S.-born residents move there. Find their report at renewoureconomy.org/issues/american-cities
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