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Immigration Reform Could Boost Housing Market, Says New Study

First Posted: May 25, 2013 11:31 AM EDT
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According to a new study, the passage of immigration reform in Washington would add about three million new homeowners to the real estate market and spearhead a recovery for the ailing housing sector.

The National Association of Hispanic Real Estate Professionals released a report this week that indicated their support for the passage of immigration reform that would grant millions of undocumented immigrants a pathway to U.S. citizenship.

According to the association's estimates, roughly six million undocumented immigrants are likely to pursue legalization and possibly citizenship. Of that number, half of those immigrants -- about three million -- are likely to become homeowners.

If that demographic becomes legal and pursues the purchase of their own homes, the study projects, it could mean that the demand for home purchases could be driven up to more than $500 billion, with an additional $233 billion in origination fees, real estate commissions and consumer spending associated with homeownership.

"Foreign-born householders have a high value and strong desire for homeownership," said Juan Martinez, NAHREP president in a statement. "They have been here in our midst for years, working and participating in our economy. Legitimizing them through immigration reforms would finally give them the access and the confidence to buy homes."

The estimates and calculations done in the association's report were calculated using data from the U.S. Citizenship and Immigration Services, using the same approach they used in their 2004 study that projected the economic impact on the housing economy through the addition of undocumented workers.

Those projections indicated that up to three million undocumented workers had the potential to afford a home worth $173,600, which is the average sales price for a home in the U.S.

"If we can get past the anti-immigrant sentiment that has so strongly colored the national conversation around immigration reform, we will see just how much our U.S. economy has to gain by legitimizing these people," Martinez said.

Because of their lack of proper ID, credit history or employment options, undocumented immigrants encounter hardship buying a home. However, as Fox News Latino points out, under the immigration proposal from the bipartisan U.S. Senate panel, undocumented immigrants could apply for a provisional legal status--allowing them to live, work and travel in the U.S. -- six months after the bill has been signed into law.

And under that status, the association projects, more undocumented immigrants will be legalized and will begin to buy their own houses, providing a booster shot to the housing market.

Already, Hispanics have been leading on the housing market. Census figures last year showed year-over-year that Latino homeownership had jumped by 7.3 percent from 6.2 million to 6.7 million, growing while homeownership by African-Americans and Caucasians dropped in that same period.

"If you took out the new Hispanic homeowners, you'd have a net loss of homeowners because of foreclosures, people moving from homeowners to renters," James M. Parrott, senior adviser for the White House National Economic Council, told the National Journal during an event in Washington examining the economic status of Hispanics.

"The fact that we're not in the red is solely the result of growth of Hispanic homeownership," he added.

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