"How Immigration Reform Will Help Fix The Housing Recovery"
In the past year, housing ownership by Americans fell to 65.3 percent while ownership increased among immigrant households. But if the bipartisan immigration bill set forth by the Gang of Eight passes, that number could soon skyrocket.
The issue of permanence currently confounds the problem of home ownership among immigrants. For legal immigrants with a H1-B visa, the maximum length of stay is six years. For undocumented immigrants, the maximum length of stay is a law enforcement’s door knock away. Currently, Individual Taxpayer Identification Number (ITIN) holders are selectively qualified to purchase houses through a few banks. Mortgage lenders base their decisions on the informal 2/2/2 rule, which specifies that one must have been employed for at least two years in the United States, pay rent for two years, and have two years worth of credit history. Addtionally, immigrants go through a careful screening that includes whether they have late payments on utilities and remit payments to family in their native countries. Legal status would allow non-citizens to have Social Security numbers, which will in turn allow them to qualify for a mortgage.
The growing trend among immigrants has been to rent for a few years, then to purchase a house as a way of solidifying their American dream. While the rental market is expected to steady because of the projected upward mobility, housing ownership is expected to increase due to increased job growth. With the push for immigration reform, the ability for highly skilled immigrants to seek jobs will allow them to pay for a home, which is often viewed as the ultimate price of permanence:
Immigrants make up just 16 percent of the United States population, but they are expected to make up 35.7 percent of homeowners by the year 2020.
One of the advantages to more immigrants entering the housing market is that it will help to fill the void in less-desired neighborhoods. In states like California, Nevada, and New Mexico, foreclosed homes remain a huge issue for crime and are a symbolic landscape of the 2007 housing bubble. Foreign-born individuals can help to revitalize once-desolate cities. While the rates of home ownership among immigrant households will increase nationwide, the largest surge will be in states where factory jobs are located such as Texas, Georgia, and Nevada.
Professor Dowell Myers of The Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA) further notes that immigrant homeowners can be more stable purchasers, “In contrast, inflows of new immigrants have not varied widely in recent decades, and in addition, the strong upward mobility of prior immigrants has led to continued increases in aggregate demand for home ownership.”
The addition of non-citizen homeowners may likely contribute three million more home buyers within the next several years. According to Gary Acosta, CEO and co-founder of National Association of Hispanic Real Estate Professionals (NAHREP), “Giving legal status to current non-citizen U.S. residents may generate more than $100 billion in new mortgage loans.”
The financial stability and purchasing power that comes with immigration reform will allow foreign-born homeowners to fully assimilate into American society. A Center for American Progress study shows that recent immigrants are embracing American values more than in decades past and are well on their way to fully integrating into American society by 2030.