Trulia chief economist Jed Kolko calculates that there are 2.4 million missing households--people who should be renting or buying but choose to live with parents or family instead.
Which is why housing reform alone is not enough. For long-term growth in homeownership, the government will also have to tackle the growing student debt problem.
As Obama noted in the Zillow broadcast, students are emerging from state universities with $25,000 to $30,000 in debt -- money that should have gone towards a downpayment on a home.
The President said the Administration is working with colleges to reduce fees, operate more efficiently and get students to graduate faster, while also working on lowering the interest rates on student loans.And while Washington solves that problem, it might as well pass immigration reform, the President noted Wednesday. "If we get immigration done, we will have all kinds of families coming out of the shadows, paying taxes, paying penalties. But we will also see them buying homes, oftentimes in some of the neighborhoods that had the most foreclosures." The President was not just pumping his voter base. Immigrants have been a major contributor to household growth in the U.S. According to a report sponsored by the Mortgage Bankers Associations' Research Institute for Housing America published in March, the number of immigrant homeowners has increased from 800,000 in the eighties, to 2.4 million between 2000 and 2010 and is projected to rise further to 2.8 million by 2020. Immigrants accounted for 82.2% and 65.1%, respectively, of the growth in homeowners in the states of California and New York between 2000 and 2010. The study found that the longer immigrants are settled, the more likely they are to buy homes. For example, among the cohort of Hispanics who arrived in the U.S. during the 1980s, homeownership rose from above 15% in 1990 to nearly 53% in 2010 and is projected to rise above 61% in 2020. Uncertainty about legal status tends to deter many young immigrants, including those legally here but waiting for a green card, from buying a home. So it is not a stretch to say that immigration reform will help housing. So now we are talking about major reform in three different areas and we are depending upon Congress to get it done. But that is what makes housing so complex. There are simply too many factors that weigh on one's decision and ability to buy a home. If the government wants to raise the rate of homeownership in this country, it will have to do more than get banks to loosen credit. -- Written by Shanthi Bharatwaj in New York.
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