Naturalized citizenship is on the rise, and they will be putting more pressure on the housing market…and housing inventory.

Naturalized citizenship is defined as immigrants who become U.S. citizens, opposed to those who are born in the country.

Citizenship applications are on the rise.

According to an immigration law firm, My Immigration Attorney, there are also several reasons why immigrants may want to become citizens, including:

  • Voting
  • Petitioning for a relative
  • Petitioning for a spouse/fiancé
  • Spending longer time periods outside U.S.

Or it could be that becoming a citizen means they can no longer be deported for any reason, a protection that even permanent residents don’t have.

Whatever the reason for wanting to become citizens, it is clearly on the rise, and even hit the highest rate of increase in four years, according to the Pew Research Center.  The number increased 8% from 663K in 2012 to 718K in 2016.

This could be due to a spike surrounding the presidential election, but there could be other causes as well. In fact, history has shown many different factors that could cause an increase in the application rate for citizenship.

For example, back in 2007 the fee for applying for citizenship was schedule to increase from $330 to $595. Before that increase, applications jumped by 89% to 1.4 million for the year, the highest increase ever recorded.

And as immigrants become citizens, that has major implications for the housing market.

Immigrants who are not citizens hold a homeownership rate of 39.3%, according to the latest data from the U.S. Census Bureau in its 2013 Current Population Survey. However, once these immigrants become citizens, that number nearly doubles to a homeownership rate of 69.7%.

 

Clearly the housing market will see a boost from the increasing number of citizens in the U.S., but just how many immigrants are applying for citizenship? In 2016, about 718,000 applicants applied for citizenship status, according to Pew Research Center. This is up significantly from 2015 and higher than any point in the past four years. 

Because of the low rate of homeownership among noncitizens, it is entirely possible that these new citizens are first-time homebuyers, and will be competing with Millennials for a limited housing supply.

However, homebuilders are finally starting to recognize the need for starter homes, and are switching gears from the luxury market and focusing on building home for first-time buyers.