Millions of post-pandemic new arrivals to the United States will significantly affect the housing market and household growth, say research scientists at Harvard’s Joint Center for Housing Studies, but a lack of information makes it difficult to predict the surge’s full impact.
Ballooning immigration—which peaked at 3.3 million in 2023, according to the Congressional Budget Office (CBO), after averaging 919,000 annually in the 2010s—will be the primary source of population and household growth in the U.S., per the Center’s 2024 State of the Nation’s Housing Report. But it is a factor marked by unknowns and unpredictability.
“[Immigrants’] full effect on household growth will take some time to be fully realized,” says Harvard Senior Research Analyst Riordan Frost, who explains that, given the lack of full demographic information, it is hard to project the number of new households associated with the estimated six million new arrivals.
Still researchers are working with some measure of insight.
“Considering what is known about these new arrivals, alongside historical data,” Frost said, “enables a clearer view of effects on household formation.”
The share of adults who are heading their own household will determine the immigration surge’s impact on household growth, Frost noted. He knows that in 2022, 34% of working-age immigrants who had arrived within the preceding five years were heads of households, according to American Community Survey (ACS) data.
The analyst takes into account that head-of-household rates rise with time in the country.
For example, the “headship rate” of working-age immigrants who arrived from 2013-2017 and had more time to establish themselves was 41% in 2022, while those in the country for 20 years or more had a headship rate higher even than native-born adults, at 50%,” Frost explained.
“Whether immigrants in the current surge will have the same headship rates as those in recent years depends on their similarity on several key factors that correlate with household formation, including age, country of origin, and immigration status,” Frost continued.
Border Patrol data reveals more families with children are crossing the Mexico border than ever before. Heads of household rates are higher for those with children, but if there are more young children than there are young adults with children, it could mean lower household formation overall.
Head of household rates among immigrants in both the 25-34 and 35-54 demographics in 2022 were much higher than in previous years, the analyst points out. In fact, that year more immigrants in the 25-34 age group were heading households than native born adults of the same ages.
In 2023, U.S. Customs and Border Protection reported that the top countries of origin included Mexico, Venezuela, Guatemala, Honduras, and Cuba. The researcher noted that recent historical data reveals lower headship rates among immigrants coming from these regions.
Researchers also must take into account asylum seekers, a group whose ability to establish a household is significantly delayed due to ineligibility to work for at least 180 days after filing an asylum claim. Data support the idea that employed adult immigrants establish households at a much higher rate (41%) than those who are unemployed (27%).
Bottom line, said Frost, is that—if the age distribution and age-specific headship rates of the current surge of immigrants are even roughly similar to recent patterns—the surge of new immigrants could result in well over one million new households over the next five years.
Historical data also suggests that the formation of immigrant households will grow with years in the country.
Said Frost, “That could mean substantial long-term implications for housing demand and labor markets in the communities where these new households form.”
Click here for more information on the Harvard Joint Center for Housing Studies report, “What Effects Will the Recent Surge in Immigration Have on Household Growth?“
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