Daily Real Estate News | Monday, June 30, 2014
Minorities are projected to make up nearly half of first-time home buyers by 2025, and account for more than one-third of U.S. households by then, according to a study by the Joint Center for Housing Studies of Harvard University.
Learn how immigrants are expected to shape the future housing demand. The Joint Center is expecting the number of households to rise overall in the next decade. It projects an increase of between 11.6 million to 13.2 million new households by 2025.
Overall, 36 percent of households will be headed by minorities by 2025, according to the study, which would be up from 31.6 percent in 2013. The age composition of households is expected to change in the next decade too, the study notes.
The number of households aged 65 and older is expected to rise by 10.7 million by 2025, due to the aging baby boomer generation. Also, as members of the millennial generation enter their 30s, the study’s researchers predict they will drive household growth by 2.7 million over the next decade.
Home ownership and rental demand may both get an uptick as a large number of immigrants are expected to enter the United States and call it home by 2020, according to a new study sponsored by the Mortgage Bankers Association’s Research Institute for Housing America. The study makes projections to the year 2020 on the growth of U.S. home owner households headed by immigrants. The number of foreign-born home owners continues to grow bigger each decade, according to the report. For example, the number of foreign-born home owners rose 800,000 from 1980 to 1990; by 2.1 million from 1990 to 2000; and then by 2.4 million from 2000 to 2010. For the 2010 to 2020 period, researchers project that number to rise 2.8 million. The home ownership rate has particularly grown among the Hispanic immigrant population. In 1990, Hispanic immigrants had a 15 percent home ownership rate, which grew to nearly 53 percent in 2010. By 2020, Hispanics’ home ownership rate is expected to rise above 61 percent, according to researchers. The states with the greatest demand from the foreign-born on home ownership are California and New York. “As the housing market continues its recovery, it is important to understand the demographic trends which are likely to impact housing demand in the years ahead,” says Michael Fratantoni, RIHA’s executive director. “This study provides information for lenders, builders, and policymakers regarding the future shape of housing demand, which the authors clearly show will be substantially impacted by the housing choices of foreign-born households, whether they are renters or home owners.”
Source: “Minorities Seen Driving U.S. Household Growth: Study,” Reuters (June 26, 2014)