By The Gonzales Group
RISMEDIA, June 26, 2008-Nearly 2.8 million Asian Indians call the U.S. home and add to the diversity and multicultural experience we enjoy in our great country.
A study done by Fannie Mae to better understand the various factors influencing Asian Indians in the home-buying process found that many of the barriers to homeownership for Asian Indians were consistent with those faced by immigrants of Latin American and other Asian groups.
Demographics – Homeownership Gap
According to the Census Bureau, the homeownership rate for Asian Indians is 47%, which is considerably lower than the U.S. rate (72%) and also below the rate for Asians in general (53%).
Asian Indians accounted for 18.8% of all Asian households in the U.S. and six in ten Asian Indians live in one of five states: California, New York, New Jersey, Texas and Illinois. California ranks #1 with 519,015 Asian Indians, followed by New York with 373,321. New Jersey, Texas and Illinois have Asian Indian populations ranging from 175,765 to 266,850.
The Fannie Mae study found that homeownership is a top priority providing emotional and practical benefits to Asian Indians. While Asian Indians cite homeownership as a top goal, career, financial stability, and family are more important. For many of these consumers, homeownership is often seen as a long-term goal, pursued after one has secured a good, stable job, a degree of financial success, and/or when one is ready to start a family.
Owning a home is also symbolic of having attained a certain station in life and is something of a status symbol. However, participants in the study cited the practical benefits of homeownership, such as the financial advantages of having an investment, money-saving tax deductions, and future retirement security, as more important than the emotional benefits. About half say they owned homes or lived in a house owned by their parents prior to coming to the U.S.
Borrowing to finance home purchase is becoming more common in India, but most buyers there still use a lump sum cash payment to purchase a home. In the U.S., the Asian Indian homebuyers surveyed typically spent about 3-5 years saving for the down payment. The majority of homeowners held 15 or 30-year fixed rate mortgages and most respondents had co-borrowers.
Interestingly, before approaching a Realtor, these consumers do their homework. Many use the Internet to search areas and research prices. Most Asian Indians say the Realtor’s nationality makes no difference. Referrals may come from friends, family, or neighbors. They have a range of expectations about what services should be provided. Some rely on the Realtor to educate them about the whole process; others have expectations that are more specific and limited, such as securing the desired home at the appropriate price.
The Asian Indian consumers were familiar with pre-approval and pre-qualification, but few had obtained either. The ability to finance a home is a relatively new concept because the practice of buying a home in India differs greatly from that in the U.S.
Realtors, mortgage brokers, and lenders are other sources of information. Nevertheless, most still feel they need to know more about the details of financing such as down payments, monthly payments, and extra fees.
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