Immigrants' Dreams Stoke Home Market
Influx of newcomers and their eagerness to buy houses may drive housing demand for next two decades.
Tu Huu Le and his family only immigrated from Vietnam in June, but they already have established a top priority: buying a home.
Reunited with his sister, Lana Weill, after more than 23 years, the Le family is acting with remarkable discipline. Mr. Le's brother, Dung, has two jobs, and Le himself is learning to bake pizzas at a local deli. Lana helps out with rent, so Tu and Dung can devote most of their pay toward a $1,000 down payment.
"Our only dream is to own a home," says Le in Vietnamese, as he sits on a donated couch. "We have the opportunity to do that here, but you can't do that in Vietnam."
If Le has become an newfound defender of the American Dream, he is certainly not alone. Some 880,000 new immigrants are coming to the United States each year, and more than 60 percent will consider home-ownership as their top priority.
For the housing industry, from realtors to carpenters, this influx couldn't come at a better time. The so-called baby bust generation, those born in the late 1960s and '70s, would never have been able to buy homes in the same numbers as their baby boom elders. In short, immigration is expected to drive housing demand for the next 20 years.
"Immigrants will account for 30 percent of the growth in the population, which will have a major impact on the demand for homes," says Michael Carliner, an economist with the National Association of Home Builders in Washington.
Even those who buy existing homes will have an effect, allowing the previous owners to put money into new dwellings. "This means that we have to ask, how do you serve this population in terms of education and mortgages and the design of the home?" asks Mr. Carliner.
The strong Asian influx in California, for instance, has meant that many builders are having to learn about the Chinese concept of feng shui (pronounced fung shway), which determines where doors and windows and appliances are placed in a house.
To be sure, border states such as California, Texas, and Florida will bear the brunt of the influx, but immigrants found their way into the heartland as well. In tiny Rogers, Ark., for instance, a large chicken processing plant has drawn 4,000 Mexican immigrants, doubling the town's population. That has meant hundreds of new homes and home loans and customers at the local grocery store.
"This is a business opportunity for the housing industry, no question about it," says John Pitkin, president of Analysis and Forecasting Inc., in Cambridge, Mass. "Those builders who understand where the needs are may be able to do much better."
Why buy a house?
Though some groups appear to succeed faster than others (83 percent of Chinese immigrant families were home-owners in 1990, for instance, compared with 71 percent of Western Europeans, 63 percent of Filipinos, and 43 percent of Mexicans), the desire is felt among all ethnic groups and income levels. And while some cultures place great importance on a home, experts say the decision to buy instead of rent is usually based on economics.
Take Mohammad Sattar. A Pakistani-born electrical engineer at National Instruments here, he says he started crunching numbers after he married his wife, Faryal.
At $500 a month, $6,000 a year, renting made no sense. "That could have been a down payment," he says, chuckling at the eight years he wasted in an apartment. But on the other hand, he considers himself fortunate. His parents back home in Lahore just bought their first home three years ago, after 30 years of saving. "Back home, you still need the money up front. Compared to that this was a piece of cake."
Catering to special needs
Some real-estate agents are beginning to carve out a niche in catering to the immigrant customers. Jos Cuervo, a Colombian immigrant himself, has been working with newcomers from Latin America, especially Mexicans, to find good neighborhoods and strong investment possibilities in the sprawl of Austin. "For people from Latin America, if you don't have a house, you don't have anything," says Mr. Cuervo. "They're not like Americans, who are, shall I say, nomadic. They keep it forever. They want to keep roots."
The drive to establish roots can be especially strong with some people. Cuervo still remembers a Mexican client who was so dedicated to his goal of buying a home that he never bought a car. He walked 11 miles to work at a rock quarry north of Austin, and 11 miles back to his apartment. Somehow, the dedication of this man impressed the seller of a home closer to the quarry. Cuervo helped negotiate a deal where the loan would be financed by the former owner. The client was ecstatic.
"He called me to ask if I knew a place to have his title framed," Cuervo laughs.
LyLy Fisher, a Vietnamese immigrant who came to the US when she was in eighth grade and later became a real estate broker, says she started out just serving the general market, but Vietnamese immigrants sought her out. They wanted a realtor who understood the needs of an Asian customer.
"For newcomers, usually they work two jobs each, both the husband and the wife, and they go to school in between their jobs," says Mrs. Fisher. "Their only problem is they come here without any credit."
For their part, the Le family had to make some major adjustments on arrival in the US. When they arrived at their rental house, for instance, the first thing they did was go out to the backyard, looking for the outhouse. After a hearty laugh, Tu's sister Lana pointed them to the room down the hall.
"It's like I'm in heaven," says Hong, Tu's wife, as their children run outside to play with the neighborhood kids and practice their English. "It's going to take some time, but we're willing to sacrifice time and put in a lot of effort to buy a house."