Immigration Is Good For The Housing Market

Please Login or Register

by: adviatech
Total views: 43
Word Count: 464

With such depressing statistics for the housing market, one wonders if it will ever turn around. More to the point, what factors could come into play that would set the market back on its feet. There are glimmers of hope on the horizon in the form of demographic changes. Things need to change so that homeowners are no longer left with a property worth less than their mortgage.

Demographics is the study of, or information about, people's lifestyles, habits, population movements, spending, age, social grade, employment, etc and if you take a microscope to these details, there are some interesting things taking place at a grassroots level that will shake up the housing industry in ways not entirely evident on the surface of things.

The good news is the country is on the brink of seeing an increase in housing demand over the next ten years. You might be wondering right about now what this has to do with immigration - a lot. Influxes of immigrants wanting housing will kick start the economy in a big way. The philosophy is that the more potential households you have, the more they will need places to live.

Higher immigration numbers combined with other prevailing social trends such as divorces on the rise and late marriages means single-person homes are the fastest growing sector in the nation. Here is where the projected immigration figures of roughly 1.2 million people will make an enormous difference. New immigrants are potential house buyers. It's as simple as that. Welcome additions to the neighborhood.

Of interest is that population projections for the next 10 years show a dramatic increase in households by an estimated average of 1.4 million a year. This is all well and good, but the current glut of unsold homes needs to be cleared first. These figures will shock you. In a two-year period between 2005 and 2007 the numbers for new and existing vacant homes for sale hit close to 2.12 million. That's a staggering 46 percent.

Generally speaking if the housing market has a six-month supply of unsold new homes, it's considered to be in good shape. When 2008 rang in there was an 11-month supply on hand. Add into those figures about an 8-month supply of existing homes and you have a housing market disaster.

Many factors have to be in place to turn this fiasco around. Topping the list of things that need to happen to improve the current housing market is welcoming more immigrants, lowering house prices, decreasing the interest rates and seeing an increase in employment. These factors should increase consumer confidence and make mortgages a whole lot easier to obtain for everyone. Immigrants buying houses on the market can only have a positive impact on the economy and the marketplace.