A new study by the National Association of Hispanic Real Estate Professionals (NAHREP) estimates that immigration reform would create three million new home sales, $500 billion in additional mortgage originations, and $28 billion in new real estate commissions within five years of passage.
These are huge numbers, enough to pressure real estate prices higher because of increased demand and to create millions of hours of new work plus a wide range of additional factory orders.
“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,” said Juan Martinez, NAHREP president.
Martinez said “foreign-born householders have a high value and strong desire for homeownership. 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.”
NAHREP says passage of new immigration rules would create solid economic benefits in the housing sector was well as throughout the economy.
- Assuming past purchase trends among foreign-born householders remain consistent, half or up to 3 million of the 6 million undocumented immigrants that are expected to pursue legalization, will also buy a home once they have legal status;
- Many of the undocumented foreign-born householders have age and income characteristics associated with potential homeownership with household incomes of about $40,000;
- Up to 3 million undocumented foreign-born householders could potentially afford a home worth $173,600, the national median sales price of a home. This would generate more than $500 billion in new mortgages, and about $25 billion in mortgage origination and refinance income;
- Assuming an average of 5.5 percent in sales commissions for these home sales, these purchases would create $28 billion in income within the real estate community;
- Home purchases by 3 million legitimized immigrants would create $180 billion in additional consumer spending within local communities based on the average $60,000 in associated purchases estimated by the National Association of Realtors in 2012.
- *These estimates are factored over a five-year period.
“Immigration reform would unleash pent-up demand for homeownership by millions of undocumented immigrants. It would help re-establish homeownership as a driving force in building wealth and accelerate the recovery of the nation’s economy,” said Alejandro Becerra, a former senior housing fellow, researcher, author and recipient of the 2011 HOPE Award.