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NICHOLAS P. RETSINAS

The new homeowners

CONGRESS, presidential candidates, and lots of Americans may be giving a tepid welcome to the immigrants settling into America's neighborhoods -- some illegally, most legally. But the housing industry should be sending a welcome wagon. And every baby boomer hoping to sell his home in the next decade should be embracing these newcomers, for they will constitute an increasing segment of the home-buying, apartment-renting market. According to University of Southern California demographer Dowell Myers, immigrants and baby boomers must "forge a new social contract."

Much of the debate about immigration revolves around the role of immigrants in the economy. Do they fill low-income jobs that settled Americans would spurn? Are they crowding citizens out of high-skilled jobs? If immigrants fill jobs during a time of low unemployment, what happens during a recession, when employers issue pink slips? Native-born Americans largely see immigration through the prism of the economy.

The housing industry yields a different prism. Consider some facts: In California, New York, New Jersey, and Florida, 20 percent of home buyers last year were new to this country. The top five surnames of home buyers in 2000 were: Smith, Johnson, Brown, Williams, and Miller. Five years later, Smith, Johnson, and Williams were still in the top five, joined by Garcia and Rodriguez. In California, in 2005, the top five surnames among home buyers were all Latino.

That pattern will surely spread beyond the coasts, as immigrants leave the gateway cities for the heartland. In 1990 one-third of all immigrants settled in California; in 2005, only one-quarter of immigrants settled there. Looking ahead, a quarter of all children in the United States under the age of 10 have foreign-born parents. Even rural areas are becoming home to these new residents: from 2000-2004, 31 percent of the net population growth in rural areas consisted of people not born in the United States. In Nebraska, the fourth most common surname of home buyers is Nguyen.

The Garcias and Nguyens are buoying the housing industry.

In many respects, that industry undergirds the economy. Including new construction, remodeling, and the purchase of furniture and appliances, housing accounts for 23 percent of the total US economy. Millions of people make their living in this industry.

The cornerstone of housing robustness is strong demand, and the foreign-born constitute a major segment of that demand. From 2000 to 2005, 40 percent of net new household formation was foreign-born, up from 30 percent in the 1990s. In the 1980s only 15 percent of net new households were foreign-born. The United States, a nation founded by immigrants, is very obviously a nation of immigrants today.

Those families need housing. Although they may rent for decades, saving up for a down payment, ultimately they want what many of their native-born counterparts want: a tangible, if mortgaged, asset. For immigrants, home ownership is the quintessential American Dream.

If immigrants want, eventually, to buy, the baby boomers want, eventually, to sell. As baby boom homeowners look to downsize, perhaps to find their dream home in a retirement mecca or a gentrified downtown, they will be putting their houses on the market. The 2004 film satire "A Day Without a Mexican" showed a California that came to a stop without immigrants. A re make of the movie, focusing on housing, would show neighborhoods with permanent for-sale signs.

Forecasting the impact of immigration does not require a crystal ball -- merely an actuarial table. The current statistics are compelling. The nation's sharp increase in immigration over the last decade will shape and define the housing market for the next decade -- and beyond. Welcome to my open house.

Nicolas P. Retsinas is director of the Joint Center for Housing Studies at Harvard University.

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