If the Senate passes immigration reform, it will add three million new homeowners, who were once undocumented immigrants, to the U.S. real estate market and lead to a housing recovery, according to Hispanic Real Estate Leaders.
As the Senate readies for an expected epic debate over a far-reaching reform bill, the National Association of Hispanic Real Estate Professionals (NAHREP) has released a report that supports a path to legalization for 11 million people now undocumented, perhaps the most contentious part of the bill.
The thinking is this: Of the 11 million undocumented immigrants, six million are expected to seek legalization, three million of which will become home purchasers and pump more than $500 billion in sales, income and spending into the U.S. housing economy over five years.
The NAHREP calls the whole process a "chain reaction" as illustrated in the info-graphic below. According to them, once they become legal those potential home owners will have household incomes of about 40,000 on average and could afford homes worth $173,600.
The NAHREP does make a lot of assumptions in its calculations, using data from the U.S. Citizenship and Immigration Services to estimate the number of Latino undocumented immigrants, potential home owners, and their estimated incomes. They used the same methodology in a 2004 study.
"Our estimates in 2004 were very conservative and we received many calls from consumers who wanted to know what lenders were offering these loans," said NAHREP co-founder Gary Acosta in a statement.
Currently, undocumented immigrants have an incredibly difficult time purchasing homes because they lack proper identification, a verifiable credit history and limited employment options, which make getting a mortgage loan nearly impossible.
But under the proposed Senate bill, undocumented immigrants could apply to adjust their status to "registered provisional immigrant (RPI status)" within 180 days of the law's enactment — as long as the secretary of Homeland Security submits to Congress a strategy for securing U.S. borders.
Those who apply and are accepted for RPI status can work for any employer and be allowed to travel in and out of the United States. After 10 years, those with RPI status would be able to apply to get permanent residency.
These new RPI status holders, according to the NAHREP, will now be legitimized and begin purchasing homes.
As a whole Hispanics, continue to lead the way in U.S. home ownership growth, accounting for 51 percent of all new homeowners in 2012. Over 1 million Hispanic households were purchased in 2012, compared to a decrease of 704,000 non-Hispanic White households, according to the NAHREP Annual "State of Home Ownership" report.
"Foreign-born householders have a high value and strong desire for home ownership," said Juan Martinez, NAHREP's president, in a statement. "They have been here for years, working and participating in our economy. Legitimizing them through immigration reform would finally give them the access and the confidence to buy homes."