Study Shows More Immigrants Buying Homes in Mid-Size Cities

RISMEDIA, March 16, 2010—In the first study of immigrants buying homes in mid-size areas across the United States, researchers at the University of Southern California Lusk Center for Real Estate showed an increasing number of new Americans are choosing to put down permanent roots outside major gateway cities, lured by less competition for jobs and growing neighborhoods of fellow immigrants. The results could help builders and local governments partner to attract the next wave of new home buyers as the exponential growth of immigrants and their descendants will represent 82% of U.S. population growth over the next 40 years.

The paper, “Immigrants and Housing Markets in Mid-Size Metropolitan Areas” by Gary Painter, Ph.D., director of research at the Lusk Center and co-author Zhou Yu, Ph.D., an assistant professor at the University of Utah, looked at 60 cities with housing priced lower than in the major gateways of New York, Los Angeles and Chicago. These mid-size areas, including Nashville, Detroit, Colorado Springs, Minneapolis, Sarasota and El Paso have shown an average 27% rise in new immigrant population at a time when the gateway cities are losing residents. The immigrants in these metropolitan areas come from all over the world, with the largest numbers from Mexico and China.

“The anticipated rapid growth of U.S. immigrant populations in the coming decades coupled with their movement into mid-size metro areas has the potential to transform communities,” explained Painter. “Our data suggest that immigrants are attracted to homes near active support networks of fellow immigrants and in places with lower rates of immigrant growth resulting in less competition for entry-level jobs,” he added.

Painter and Yu also found that immigrants continue to have a lower homeownership rate than native-born Americans with the same income and education levels. “Many of these immigrants may be waiting for other family members to join them before setting down more permanent roots,” explained Painter, who plans future research into the disparity in homeownership rates. He suggested that cities trying to lure immigrants with employment opportunities also start developing networks of real estate agents and lenders with the same ethnic backgrounds and a willingness to build strong ties to the new arrivals. “Nurturing links within the immigrant community is key to building a new rank of homeowners,” he said. Painter pointed out that areas with declining home values could see prices stabilize thanks to a wave of first-time home buyers who speak English as a second language.

For more information, visit www.usc.edu/lusk.

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