S.D. DRAWS FOREIGN-BORN OWNERS
Report by LendingTree shows metro area is the ninth-highest in U.S. in number of homeowners born elsewhere
“People from outside the U.S. are spending so much on their homes ... because they don’t have as many options.” Jacob Channel LendingTree senior economist
The San Diego metro area has one of the highest percentages of foreign-born homeowners in the nation, says a new report.
Personal finance website LendingTree said 24.1 percent of San Diego homeowners are foreign-born, making it the ninth-highest of the nation’s metros. San Jose is the leader with 45 percent of owners who are foreign-born.
LendingTree used data from the 2020 U.S. Census, which doesn’t break down by country of origin. Jacob Channel, LendingTree senior economist, said it is safe to assume a lot of foreign-born buyers here are from Mexico, and others are from the region’s substantial and diverse Asian population.
Data like this can be used for xenophobic purposes, but Channel said the report instead shows how much harder it is for people not born in the United States to own a home. While 24.1 percent of homeowners might be foreign-born, that leaves the vast majority — more than 75 percent — of San Diego owners as native-born.
An important distinction in the study: Foreign-born San Diegans don’t own 24.1 percent of all the homes in the region. Instead, the LendingTree study is just looking at what percentage they make up of all homeowners (called “owner-occupied” in the Census). There are more than 1 million housing units in San Diego County and roughly half are owned, with the rest used for rentals.
Income data shows foreign-born residents spend around 34.1 percent of their income on housing, compared to 30.9 percent for nativeborn San Diegans. Channel said it isn’t that foreign-born buyers value homeownership more and will try harder to purchase, it’s more likely they don’t make as much money, or don’t have as much access to it.
“The reason why many people
from outside the U.S. are spending so much on their homes is because they don’t have as many options,” he said. “Typically, if you are earning less money, you are allocating more of that money toward housing.”
Homebuyers not born in the native country tend to be a hot topic around the globe as housing shortages persist. Canada has announced a two-year ban on nonresidents buying homes. The Ukraine war has put new pressure, and attention, on the many Russian owners of London real estate. The U.K. government has passed a host of new laws aimed at making it more difficult for oligarchs to buy property.
Channel said there are a lot of factors that go into rising home prices in the United States and it’s incorrect to blame high prices on
just foreign-born owners moving in. About 23 percent of the San Diego metro area — which includes all of San Diego County — is made up of people from different countries, much lower than places like Miami, where 41 percent of the city originates from other nations, largely Cuba.
Foreign-born homeowners are mainly in the nation’s most expensive markets — which might seem strange considering the nation’s history of cash-strapped immigrants coming here to make a new life. But many immigrants settle in areas where they have relatives, and oftentimes those are in big cities like New York versus a smaller and lower-cost metro where they might not have any family, Channel said.
He said sometimes people like to make the connection of high-cost areas being more expensive because there are more immigrants
there, but the reality is many people are moving there for built-in communities.
“A lot of times, maybe, they would prefer finding a place that’s a little less expensive,” Channel said of immigrants. “But, you can have a little bit of an easier time if you are moving somewhere with a big population of people that are from where you are from, who speak your native language.”
In addition to San Jose,
the top metros where homeowners are foreign-born are Miami (44 percent), Los Angeles (38 percent), San Francisco (33 percent) and New York (29 percent). The least likely metros to have immigrant buyers are also the ones with very small foreign-born populations: Pittsburgh (3.2 percent are foreign buyers), Birmingham (4 percent) and Cincinnati (5 percent).
Chinese buyers in the United States have received considerable attention over the last decade. Two local websites were set up to attract Chinese buyers to property in San Diego, Juwai and Caimeiju. However, crackdowns by Beijing on money spent outside the country, the trade war with the Trump administration and COVID-19 have significantly slowed purchases.
Considering COVID-19 shut borders for nearly two years — including for visa holders in Mexico — Channel said it is likely there will be a slowdown in immigrants owning homes, but it should pick up again as borders reopen.
LendingTree used a broad definition of foreignborn for its study that included naturalized U.S. citizens, lawful permanent residents, temporary migrants (such as students), refugees and undocumented immigrants.