The longer immigrants are in the U.S., the stronger their financial footing becomes and the more likely they are to buy homes, according to a new Fannie Mae report.
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Immigrants have also shown they can weather a housing crisis better than native-born Americans, according to the study. The home ownership rate of immigrants remained relatively strong during the recession, while the home ownership rate of native-born Americans fell.
Between 1990 and 2000, the immigrant home ownership rate remained steady, but it rose by 2.6 percentage points between 2000 and 2010, according to the Fannie Mae report. On the other hand, the native-born home ownership rate rose 2.8 percentage points from 1990 to 2000 but fell 1.2 percentage points from 2000 to 2010.
"The length of U.S. residency is an important factor that helps to determine immigrant advancement into home ownership," notes the report’s author, Azanaw Mengistu, an analyst at the Fannie Mae Economic and Strategic Research Group. "However, other factors, including the prevailing economic and housing environments, may have played important roles."
Also, recent research from Rutgers University and the Georgia Institute of Technology notes the importance of "birthplace networks" among immigrants — communities of friends and families from the same country that provide the means to buy a home or maintain one.
Housing experts point to immigrants as a major group that will drive the housing market in years to come. The 18.8 million immigrant renters in the U.S. are a sizable pool of potential future home owners, according to the Fannie Mae report. Between 2010 and 2020, the Research Institute for Housing America predicts that immigrants will account for more than one-third of the growth in home-owning households, and more than one-quarter of the growth in renter households.
"Understanding the immigrant home ownership experience is important for several reasons," Josh Miller, a housing policy economist at the National Association of Builders, wrote in a blog post earlier this month. "The first is that immigrants are projected to be a significant part of home ownership growth in the near future. Secondly, home ownership among this group leads to positive spillovers, including wealth accumulation and community involvement. Finally, learning about the immigrant home ownership experience may shed light on the broader housing market."