Immigrant Homeownership Gains Outpaced U.S. Natives in the 2000s

A drop in homeownership among the native-born population, coupled with a pickup in the pace of homeownership gains among those who immigrated to the U.S. have narrowed the homeownership gap between the two demographics during the last decade, according to Fannie Mae research.

Immigrants narrowed the homeownership gap at a faster rate during the 2000s than in the 1990s, "suggesting that the recent housing crisis may have had a lesser impact on homeownership advancement of immigrants relative to the native-born population," Fannie Mae's latest "Housing Insights" report notes. The research, released Aug. 25, explores how the recent housing crisis has affected the gap in homeownership rates between the native-born and immigrant segments of the U.S. population.

The homeownership gap between the two segments was 14.7% in 2010, down from 18.5% in 2000. Census data show the native-born homeownership was 67.1% in 2010, down from 68.3% in 2000. That compares to an immigrant homeownership rate of 52.4% in 2010, up from 49.8% the previous decade.

"[T]he gain in the homeownership rate for immigrants during the 1990s outpaced the rate for the native-born, narrowing the homeownership rate gap by 8.8 percentage points," the report noted.

The share of the immigrant population that has lived in the U.S. for more than 15 years was 62.9% in 2010, up from 56.7% in 2000, which helped boost homeownership rates, even while the effects of the Great Recession led to a drop in native-born homeownership, the report said.

"This shift in the composition of the foreign-born population toward longer duration likely was a factor that contributed to the increase in the overall foreign-born homeownership rate during the 2000s," the report said.

"[T]he length of U.S. residency is an important factor that helps to determine immigrant advancement into homeownership. However, other factors, including the prevailing economic and housing environments may have played important roles," it added.

The crisis affected the homeownership rate in an unexpected way, as native-born homeownership increased between 1990 and 2000, but declined between 2000 and 2010, while immigrant homeownership remained flat in the 1990s and then increased after the 2000s.

Citing the Census Bureau's American Community Survey, the report said there is "a large reservoir of potential future homeownership demand," as more immigrants turn into homeowners the longer they reside in the U.S. For example, in 2012 the total number of immigrant renters in the U.S. was 18.8 million.

"Continued study of how these and future immigrants advance into homeownership as they reside longer in the U.S. may provide valuable insights into future prospects for the country's housing market," the report said.

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