Household and homeowner household projections have dropped due to lower immigration rates, according to a new addendum to an earlier report from the Harvard Joint Center for Housing Studies (JCHS).
The initial report had been based on “middle series household projections,” which uses historical immigration averages from the last 30 years to predict future immigration trends. However, Administration actions have led to much lower immigration levels in the last year, resulting in revised projections by JCHS, the Congressional Budget Office and others, according to Daniel McCue, JCHS Senior Research Associate.
“The addendum is meant to provide a fuller sense of the range of possible housing demand outcomes over the next decade that now includes a scenario where immigration levels remain below average,” according to JCHS. “The addendum does not replace the original analysis but supplements it with an alternative projection set reflecting conditions that now appear more likely.”
The addendum is intended to reflect the shifting demographic landscape and give policymakers, practitioners, and researchers a clearer sense of the impacts associated with lower than expected immigration, McCue said. “The addendum underscores that the housing outlook for the next decade is more sensitive to immigration trends than some might assume.”
The new projection is that 420,000 immigrants will annually enter the country over the next decade, compared to the earlier projection of 870,000 annually. As a result, projected household growth falls by about one fifth.
Breaking Down the Numbers
JCHS added that most of the decline is in younger households and households of color, since immigrants disproportionately fall into these groups. “The low-immigration scenario does, however, lead to slightly higher homeownership rates in 2035 than projected under the middle-series projections, but the higher homeownership rate is due to an outsized reduction in renter household growth in that scenario, rather than to an increase in homeowner household growth.”
New homeowner household will grow at about 586,000 per year, 15% below the previously projected figure.
JCHS has also reduced its projections renter household growth, with the drop anywhere from 16 to 42%, depending on different scenarios.
Projections for renter household growth fall as well—by 16% to 42%—representing 74,000 to 86,000 fewer renter households per year depending on the scenario (Figure 3). Switching to the low-immigration projections, renter growth falls from 523,000 to 437,000 households per year under the highest scenario, and from 174,000 to just 100,000 households per year under the lowest scenario. Thus, the reductions further depress what were already historically low estimates of both homeowner and renter household formation through 2035.
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