Jun 11, 2013

Immigration Reform Suggests $500 Billion Housing Boom

Immigration reform is on everyone lips in the recent past. We are sure that no one doubts that something needs to be done about the immigration situation in the country. What, how, and when are questions that needs a lot of discussion and debate.  Only then will a meaningful conclusion be able to be reached. Whether back taxes need to be collected, what happens if immigrants are able to sneak in to the US in the future, all these are questions that will have to be answered in time, but fact of the matter is that these "legalized" citizens will be bold enough to make some purchasing decisions without fear of the law of the land. This undoubtedly is positive for the entire real estate and mortgage industry

As per Mortgage News daily, the immigration reform bill will finally get it's debut on the floor of the Senate tomorrow with potentially big implications for the Housing and Mortgage markets.  Though not specifically related to immigration reform, the CAP recently argued that the future mortgage market will benefit from providing more credit access to socioeconomic groups that have had less access in the past.

Before that, the National Association of Hispanic Real Estate Professionals (NAHREP) was out with a slightly different take on the same core concept: more participants in the housing/mortgage means more business.  The Association estimates that some 6 million undocumented immigrants would pursue legalization--about half of those with the desire and the economic resources to buy a home.
The estimates suggest a new pool of roughly 3 million new prospective homeowners, capable of purchasing a home at the median price of $173,000.  NAHREP based its projections on updated data and the approach it used for its 2004 study "The Potential for Home ownership Among Undocumented Workers." Using information from that study it estimates that those 3 million prospective homeowners would pump about $500 billion into the housing market.

But that would be just the beginning, NAHREP said. The chain reaction triggered by those home purchases would bring an additional $233 billion in spending for origination fees, real estate commissions, and consumer spending associated with home ownership. These expenditures are factored in over a five year period.

"Foreign-born householders have a high value and strong desire for home ownership," said Juan Martinez, NAHREP president. "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 press released said that other housing and corporate leaders that work closely with the underserved market agree that legalization will spark swift interest in homeownership among these Latinos because they are already established in communities here in the U.S.

No comments: