- Study shows lower housing costs in smaller cities do not immediately translate into higher homeownership rates
- Immigrants pool resources to buy one home for multiple families
- Younger immigrants more likely to own homes than U.S.-born counterparts
Los Angeles -- Both foreign-born and U.S.-born migrants who move to one of 14 "emerging gateway cities" have lower homeownership rates than households that move within a metropolitan area, according to the results of a study at the University of Southern California's Lusk Center for Real Estate (www.usc.edu/lusk).
"Past housing research focused on the established gateway metropolitan areas, where 50% of all U.S. foreign-born population lives," said the Lusk Center's Gary Painter, Ph.D., associate professor at the USC School of Policy, Planning and Development. "Our study focused for the first time on the emerging gateway metropolitan areas. These cities have experienced large-scale population increases from immigrants moving directly from overseas or migrating domestically from larger cities, as well as an influx of U.S.-born households migrating domestically. While we assumed that lower housing costs in these emerging markets might improve homeownership rates, the results in fact suggest that leaving established gateways does not provide migrants a boost in homeownership attainment. They need time to establish themselves in the labor market, achieve an income level that makes homeownership possible, and find a home that is affordable."
The study by Painter and Zhou Yu, a graduate student, looks closely at comparisons of 1990 and 2000 census data. They discovered that immigration patterns changed over the last decade. While previously most immigrants came to this country through one of the six "gateway" cities of New York, Chicago, Miami, San Francisco, Los Angeles or San Diego, large numbers of immigrants are migrating from overseas to one of the 14 fast-growing emerging gateways located nationwide.
The 14 emerging gateway cities are Atlanta, Boston, Dallas, Denver, Houston, Las Vegas, Orlando, Philadelphia, Phoenix, Sacramento, Seattle, Tampa, the Washington, D.C./Baltimore corridor, and West Palm Beach.
Painter and Yu tested a number of hypotheses that are important for immigration and housing. As past research has shown, recent immigrants have worse housing outcomes than existing residents when they first arrive in the United States, and the deficit persists for 10-15 years, diminishing over time. The decision of immigrants to locate in high-cost cities explains part of the homeownership gap, as does national origin. Immigrants from second- and third-world countries are likely to possess less education and fewer financial assets and are initially less settled and less adapted, making them more mobile. Over time, the negative impact of immigrant status fades away as households assimilate into metropolitan areas. "Because 47 percent of immigrants have entered through the 14 emerging gateways in the past 10 years, immigration has a greater impact on homeownership in these cities," said Painter.
The researchers also said they discovered factors that improve the housing outcomes for immigrants. They assumed that living in crowded conditions is typically related to lower homeownership, which proved true in the results of the 1990 census. By 2000, however, multiple residents in a household, producing multiple incomes, had become a positive predictor of homeownership, as immigrants are pooling their incomes to finance home purchases. "In particular, Latino immigrants fare better than others in crowded conditions and Asians likewise benefit from having additional incomes in the household," Painter said.
"We also found that while it remains true that home ownership rises with age, younger immigrants are more likely to own a home than U.S.-born households of the same age," he added. Previous research indicates that these immigrants have strong upward mobility and make home ownership a priority in their goal to attain status in this country. Early home ownership is less of a priority for their U.S.-born counterparts.
Because immigration and migration provide engines of population growth and new labor market entrants, Painter said his research will continue to focus on the long-term impacts of large-scale migration on U.S. housing and labor markets.
The full text of the research can be found here.