The latest Housing Insights from Fannie Mae’s Economic & Strategic Research Group, they look at how the homeownership rate gap has changed during the past 10 years and, in particular, during the recent housing crisis compared to previous years.
In an instance of solid serendipity, just weeks after HousingWire Magazine asked if immigrants can save housing, Fannie offered an answer.
Their research, in line with existing research, shows that as immigrants have stayed longer in the U.S. they have narrowed the homeownership rate gap with the native-born population. Researchers also found that immigrants narrowed the homeownership gap at a faster rate during the 2000s than in the 1990s – suggesting that the recent housing crisis may have had a lesser impact on homeownership advancement of immigrants relative to the native-born population. (The full report can be read here.)
Native-born homeownership increased between 1990 and 2000, but declined during the subsequent decade. In contrast, immigrant homeownership was flat between 1990 and 2000, but increased during the 2000s.
Click the image to enlarge.
The rise in the immigrant homeownership rate in the last decade is somewhat surprising given the last recession and the housing crisis. One possible explanation for the increase is the shift toward longer duration of residency in the U.S. among the immigrant population in 2010 compared to 2000.
For example, the share of immigrant households that had resided in the U.S. for longer than 15 years increased from 56.7 percent in 2000 to 62.9 percent in 2010. This shift in the composition of the foreign-born population toward longer duration likely was a factor that contributed to the increase in the overall foreign-born homeownership rate during the 2000s.
Click the image to enlarge.
In the decade 2010-2020, immigrants are projected to account for 32.2% of the growth in all households, 35.7% of growth in homeowners and 26.4% of growth in renter households, according to the Research Institute for Housing America in a study sponsored by the Mortgage Bankers Association.
As HousingWire has reported, Hispanics are more likely than the general population to prefer owning a home, according to Fannie, and more Hispanic renters than the general population (88% vs. 71%) say owning makes more financial sense than renting.
The Asian American and Pacific Islander population, which totals 18.6 million, has increased more than 50% since 2000. The group’s $718 billion in buying power is expected to reach $1 trillion by 2017.
According to the American Community Survey, the U.S. was home to 18.8 million immigrant renters in 2012, representing a large reservoir of potential future homeownership demand, Fannie says.