Since 2000, the Asian American community has been the fastest-growing minority demographic in the U.S., with a rapidly growing purchasing power. Twenty-eight percent of Asian American households include two or more adult generations, double the rate of non-Hispanic whites, and one out of 10 Asian Americans own a business. By 2024, there will be 1.8 million more Asian households formed. The Asian Real Estate Association of America’s (AREAA) recently released 2015 report on The State of Asian America highlights what you as a real estate professional need to know about this important population.
“This report shows the tremendous buying power of Asian Americans and Pacific Islanders (AAPI) not only now, but for the foreseeable future,” says Vicky Silvano, AREAA 2016 National Chairwoman. “Over the past five years, AAPI took out two million home loans, representing $600 billion in mortgage originations, more than any other minority group. Asian Americans tend to have higher credit scores, low APRs, lower DTI, and lower LTV ratios. They also have higher median personal and household incomes than the U.S. general population, as well as more education, with nearly half of all AAPI holding at least a bachelor’s degree. Our research also found AAPI aren’t content to stay in the traditional ‘gateway’ cities of Los Angeles, New York, and San Francisco anymore; nearly every state experienced at least 50 percent growth in their Asian population since 2000, with states in the South and the West making the biggest gains.”
Asian American-owned businesses increased by 40 percent from 2002-2007, according to a U.S. Census Bureau Survey of Business Owners. Currently, there are over 1,600,000 Asian American-owned businesses in the U.S., representing over $500 billion in annual economic output. This gives Asian Americans a whole lot of power to purchase homes.
Housing and Investments
The Asian American community applied for, and received, the largest share of purchase money mortgages of any minority group in terms of both number and monetary value, according to the 2014 study “Asian American Outcomes in the U.S. Mortgage Market.”
Discrimination against Asian Americans in Housing
Despite their prevalence in the market, Asian renters who contact agents about recently advertised housing units learn about 10 percent fewer available units and are shown nearly 7 percent fewer units than whites, according to the AREAA report. Asian homebuyers who contact agents about recently advertised homes for sale learn about 15 percent fewer available homes and are shown nearly 19 percent fewer units than whites.
Up and Coming
According to the AREAA report, by 2024 there will be 1.8 million more Asian households formed. Additionally, there will be 33 percent more new minority homebuyers, and 88 percent of all new rental demand will come from minority communities.
“It’s important to resist the ‘model minority’ myth that stipulates all AAPI are well-off and, therefore, do not require government assistance or protections,” says Silvano. “The fact is, while a great many in the community have enjoyed financial and academic success, many more have not. Many Southeast Asian nationalities, including Bangladeshi, Cambodian, Vietnamese, and Laotian, lag far behind in personal and household income as well as educational attainment. It is because of this varying degree of success that it is important we continue to seek policies that help these communities achieve the American Dream of homeownership.”
For more information, visit www.areaa.org.