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Immigrants, Hispanics, and the Evolution of Housing Prices in the US

Working paper #588
Albert Saiz

How has immigration and the associated growth in the Hispanic population impacted the evolution of housing prices and rents in the United States? The answer to this question depends on the scale of the local housing demand shock associated with immigration and the growth in the Hispanic population in a city. This paper reviews the existing literature on the issue and introduces a number of new facts. Cities where immigrants moved to experienced faster housing price and rent appreciation during the last two decades of the 20th century. Hispanic-dense metropolitan areas have more expensive housing. Part of the price differential is due to the growth in the Hispanic population, and we derive a statistical causal link between Hispanic growth and average housing price growth. However, within metropolitan areas it is precisely those neighborhoods with increasing Hispanic share where relatively slower housing price and rent appreciation took place. The facts are consistent with immigrant and Hispanic population growth generally driving up the demand for living in a city, but with increasing ethnic segregation within the city.

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