The Impact of Immigration on the Housing Market
Collectively, immigrants have added $3.7 trillion to U.S. housing wealth, helping stabilize communities across the United States. The map below, the result of research by AS/COA and Partnership for a New American Economy, shows the net change in a county’s immigrant population from 2000–2010 and the corresponding effect on median home value. Learn more about how immigrants boost U.S. economic vitality through the housing market and view methodology.
Scroll over a county or type in a zip code in the bottom right to see the impact of immigration on average home values.
FAQs About This Interactive
Question: What is the main takeaway from this map?
Answer: The research shows that an increase in the absolute number of immigrants in a particular county from 2000–2010 results in corresponding economic gains—increased demand for locally produced goods and services, a corresponding inflow of U.S.-born individuals—that are reflected in the housing market.
Importantly, the research finds that immigrants revitalize less desirable neighborhoods in costly metropolitan areas, opening up new alternatives for middle- and working-class Americans to buy homes, and immigration supports the housing market without exacerbating the nation’s worst affordability problems, because immigrants themselves tend not to settle in the most expensive places. Immigrants are also drawn to Sun Belt cities like Houston where housing has been consistently affordable.
Question: How can this research claim that immigration causes communities to thrive? Isn’t it the other way around—immigrants move to thriving communities?
Answer: This basic chicken-and-egg problem was the most important challenge in the methodology. Fortunately, it’s a problem that many labor economists have faced before, and the strategy used in this report mirrors techniques that have been used frequently in several peer-reviewed studies of immigration’s impact on the labor market.
Immigrants do tend to favor communities with plentiful opportunities, but it is also well-established that they favor communities where immigrants of their own nationalities are already living. For many immigrants, the presence of a social network—the key to finding housing, employment, and friends—trumps the local labor market in driving their location decision. Immigrants might move to a county for one of two reasons, then: because the local economy is strong, or because there is an existing network of immigrants already there. The basic strategy in this research is to analyze the impact of immigrants who choose for the latter reason and not the former. It uses a statistical technique known as instrumental variable analysis to execute the strategy.
Question: The average American house is bigger than it used to be. Is the research just saying that both houses and the immigrant population have grown over time?
Answer: The study accounts for key characteristics of housing units: When were the homes built? Are they single-family homes or apartments? It also controls for key housing market indicators: vacancy rates, average prices ten years ago, and the sheer number of units in a county. The study also includes statistical controls that account for all permanent characteristics of a county, such as scarcity of buildable land, and all nationwide economic and housing trends.
Question: Are the results skewed by the housing bubble and burst?
Answer: The results are based on a study of the entire period between 1970 and 2010, of which the housing bubble and burst are a small part. Moreover, no housing price data in the study are taken from the period between 2001 and early 2006, the peak period of bubble inflation.
This research was made possible with support from the Rockefeller Brothers Fund. The opinions and views of the authors do not necessarily state or reflect those of the Fund or of the members or boards of directors of Americas Society and Council of the Americas.