Immigrants and Mortgage Delinquency

Abstract

This paper studies the effect of immigrant status on mortgage delinquency. Due to their different social and economic background, immigrant households may not integrate well into the host society and therefore are more likely to be delinquent on mortgages than otherwise identical native-born households. We test this hypothesis by comparing the mortgage delinquency rate between immigrant and native households in the 2009 PSID data, in which all the immigrant households have been in the U.S. for more than 10 years. We find that after controlling for observables, those relatively recent immigrants who have been in the U.S. for 10 to 20 years have a higher mortgage delinquency rate than natives, while immigrants who have resided in the US for more than 20 years are no different than natives. In addition, there is no evidence that the second generation of immigrants is more likely to be delinquent than the third-or-higher generations. Our results are robust to potential sample selection bias and functional misspecifications.

Keywords: Immigrants; Mortgage delinquency