Study: Immigrants lured to mid-size cities by hopes of homeownership

Researchers at USC's Lusk Center for Real Estate said today an increasing number of new Americans are putting down permanent roots outside major urban centers, lured by less competition for jobs and
growing neighborhoods of fellow immigrants.

The results of what's billed as the first study of immigrants buying homes in mid-size areas across the United States could help builders and local governments partner to attract the next wave of new homebuyers, the researchers said.

The exponential growth of immigrants and their descendants will represent 82 percent of U.S. population growth over the next 40 years, according to the Lusk Center.

Gary Painter, director of research at the Lusk Center, and co-author Zhou Yu, an assistant professor at the University of Utah, looked at 60 cities with housing priced lower than in the major gateways of Los Angeles, New York and Chicago.

Those mid-size areas, including Nashville, Detroit, Colorado Springs, Minneapolis, Sarasota and El Paso, have shown an average 27 percent rise in new immigrant population at a time when the gateway cities are losing residents, according to the researchers.

The immigrants in these metropolitan areas come from all over the world, with the largest numbers from Mexico and China, Painter said.

"The anticipated rapid growth of U.S. immigrant populations in the coming decades, coupled with their movement into mid-size metro areas, has the potential to transform communities,'' Painter said.

"Our data suggest that immigrants are attracted to homes near active support networks of fellow immigrants and in places with lower rates of immigrant growth, resulting in less competition for entry-level jobs,'' he added.

Painter and Yu also found that immigrants continue to have a lower homeownership rate than native-born Americans with the same income and education levels.

"Many of these immigrants may be waiting for other family members to join them before setting down more permanent roots,'' said Painter, who is planning future research into the disparity in homeownership rates.

He suggested that cities trying to lure immigrants with employment opportunities also start developing networks of real estate agents and lenders with the same ethnic backgrounds and a willingness to build strong ties to the new arrivals.

"Nurturing links within the immigrant community is key to building a new rank of homeowners,'' he said.

Painter said areas with declining home values could see prices stabilize, thanks to a wave of first-time homebuyers who speak English as a second language.

KPCC's Nick Roman contributed audio to this report.

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