Asian Americans a fast-growing buyer market
NEW YORK – May 10, 2019 – The Asian American and Pacific Islander (AAPIs) demographic could become the nation's largest minority group over the next few decades, according to the 2018-2019 State of Asia America report produced by the Asian Real Estate Association of America, in conjunction with RE/MAX and Freddie Mac.
The population's close family ties, high education, entrepreneurial spirit and higher household income are expected to have a big impact on the U.S. economy and housing market, the report says.
AAPIs show some of the largest gains among any other minority group in homeownership. They tend to live in multigenerational homes, and researchers say that their homeownership numbers may even be skewed lower because of that.
"The report highlights the growing power and influence of the AAPI community – the fastest-growing population in the United States," writes Mike Reagan, senior vice president of global alliances at RE/MAX LLC. "Real estate professionals who take time to learn more about the unique needs and challenges of the AAPI community position themselves to provide better service and more value to customers."
Between 2000 and 2015, the AAPI population grew by 72 percent in the U.S. The population is outnumbering Hispanic-Americans, the report notes. U.S. Census Bureau and Nielsen reports project that by 2055, AAPIs will become the largest minority group in the country due to immigration and domestic growth. The AAPI demographic is diverse and represents more than 50 ethnicities.
AAPIs' higher incomes and rates of education, higher credit scores, and low loan-to-value and debt-to-income ratios make them particularly well-positioned to become homeowners. AAPIs continue to take out the largest loan amounts of any ethnic group, with average home purchases of more than $390,000.
The average loan amount for AAPI buyers has risen nearly 40 percent from 2004 to 2017, the report shows.
Relocating to the South
The AAPI population is increasingly heading to the South, and the Midwest is the second-fastest-growing region.
The growth of Asian populations in the South has been significant, the report notes. Along with a combination of immigration, relocations and new births, AAPI populations grew nearly 70 percent between 2000 and 2010 in the Southern region of the U.S. Some of the fastest growing AAPI populations are in North Carolina and Georgia, which respectively saw an 89.5 percent and 85.6 percent population increase between 2000 and 2012. Texas is also seeing significant growth, though behind other states like California and New York.
Homeownership barriers do exist, however
The number of AAPI homebuyers has increased 27 percent since 2001. However, their numbers still lag behind other groups. In the fourth quarter of 2018, the non-Hispanic white homeownership rate was 73.6 percent compared to 58.1 percent of Asian, native Hawaiian, and Pacific Islander; the rate for blacks was 42.9 percent and for Hispanics 46.9 percent.
"However, AAPI homeownership still falls behind the national average and significantly behind non-Hispanic whites," according to the report. "Many reasons contribute to this, including language barriers, lack of knowledge, and lack of education in the homebuying process."
Source: "2018-2019 State of Asia America," Asian Real Estate Association of America (May 8, 2019)
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