Immigration Reform: A Positive Factor for Utah Home Valuesadmin
Most people understand the reality that location and demand are the prime factors in long-term real estate values. However, it is easy to ignore many of the other factors that actually determine the right location and increasing demand. Yet it is these important trends that are responsible for increasing home prices over both the short and long term. For example, some of the recent announcements by President Obama bode well for the demand for all homes, and especially those located in Utah and the Salt Lake area.
In fact, home ownership is one of the cornerstones of the principles espoused when President Obama addressed the immigration issue in Phoenix recently. He stated, “When more people buy homes and play by the rules, home values go up for everybody, and according to one recent study, the average homeowner has already seen the value of their home boosted by thousands of dollars just because of immigration.”
This fact isn’t just conjecture; it is supported by numerous studies by private firms and government agencies, including Housing and Urban Development.
Utah’s Unique Position
While he was addressing home valuations nationwide, Utah residents stand to receive more immediate benefit than other parts of the country. This is largely due to our large Hispanic and immigrant population. According to the Salt Lake Tribune, our Latino population has grown by more than 78 percent in just a decade, with Hispanics now comprising 13 percent of the total population. Moreover, that trend is increasing, indicating a continued growth in this segment of our demographic makeup.
In fact, the U.S. Census show that Salt Lake City is one of the nation’s most popular destinations for Latinos, where they currently comprise more than 22 percent of the total population. Again, this is a trend that has increased over recent years, and it shows no sign of slowing down.
Why does this have specific significance for our communities and home values? This question is answered by the HUD Secretary Julian Castro. He points out that,”When current residents who are in limbo about their status gain stability, one of their first priorities is to purchase a home.” That, of course, is the precise dynamic that drives increasing demand for existing and new homes.
Looking Behind the Big Numbers
Aside from the total population of Hispanic residents, they drive several other important numbers and demographic factors. These include:
- One in four of the Hispanic residents are Millennials, the group of young residents born in the 80s and 90s. These represent new families in the making, calling for new homes and residences. Within this age group, Hispanics are by far the largest single racial group.
- Hispanics seek home ownership faster than other racial groups. According to research by the Metropolitan Housing and Communities Policy Center, Hispanics will account for more than 55 percent of all new homeowners between 2010 and 2020, and this projection was made before the current announcements.
- Federal lending policies favoring first -time homebuyers. Recent changes in the FHA program and other government-backed mortgages are designed to lower the barriers for new home buyers and increase demand even further.
While we already enjoy a solid housing market in our state, we can anticipate a strong boost from new buyers as immigration reform becomes a reality.