How Does Immigration into the United States Affect the Country’s Housing Market?
Increases in immigration into a metropolitan statistical area (MSA) are linked with rising rents and home prices in that MSA and neighboring MSAs, according to Abeba Mussa and her colleagues. The authors use data from the US Department of Housing and Urban Development and the Federal Housing Finance Agency to observe changes in rent in 275 MSAs and home prices in 282 MSAs, respectively, between 2002 and 2012. To measure the relationship between housing costs and immigration, the authors supplement these data with information about changes in immigrant inflows from the US Department of Homeland Security. The authors also included each MSA’s income and land per capita, burglary and murder rates, and unemployment and housing permit rates in their model.
- An increase in the number of immigrants equal to 1 percent of an MSA’s total population was linked with a 0.8 percent increase in rents and a 0.8 percent increase in home prices.
- This same increase in immigrants was associated with a 1.6 percent rise in rents and a 9.6 percent rise in home prices in surrounding MSAs.
- As immigrants move into an MSA, natives tend to move to surrounding MSAs, indicating that the spillover effects may be driven by native-population movements.
Photo by Diego G. Diaz/Shutterstock