Looking for the next source of housing demand? International immigration has a positive impact on local housing markets, according to a recent release by the Federal Reserve Bank of Atlanta. Specifically, international immigrants:
- boost home prices;
- raise homeownership rates; and
- increase household formations.
Each international immigrant increases local average home prices by approximately 12 cents, according to findings from Duke University.
Nationwide, international immigrants are expected to make up nearly a third of the household formations to take place between 2010 and 2020, according to the Research Institute for Housing America.
Foreign immigration’s implications are much greater for the Golden State. In California, 82% of the growth in homeowner households was due to foreign-born individuals during 2000-2010. This is projected to decrease to 71% in 2010-2020, but is still incredibly high compared to the nationwide rate of 36%.
The homeownership rate for California’s foreign-born population is currently just below 50% and is expected to rise throughout this decade. Undocumented immigrants have a much lower homeownership rate of 17%, which is expected to rise as immigration reform progresses in the coming years.
The takeaway from this news? Californians are advised to count themselves lucky. Our state’s large foreign immigrant population is sure to add some medicine to the languishing homeownership rate later this decade. Broaden your client base by learning more about the housing needs of your community’s immigrant population, or recruit an agent who has roots in that community. Research the media accessible to new immigration populations, and advertise your services. Like with any real estate deal, treat your clients well and you’ll be rewarded with word-of-mouth referrals.