2016 was a momentous year for the Asian American and Pacific Islander community. The Census Bureau—which had, up until July, grouped Asian Americans and Pacific Islanders (AAPI) into a “Other” category—agreed to include a separate category for AAPI in its research.
The importance of that change is highlighted in the Asian Real Estate Association of America’s (AREAA) recently released 2016 State of Asia America Report, which includes, for the first time, accurate data about AAPI homeownership. AREAA campaigned for the change as part of its No Other initiative, making a case for the separate category with the help of government leaders and partners in the real estate industry.
In 2016, the AAPI homeownership rate was 55.6 percent—considerably below the 59 percent recorded in 2015, when AAPI were labeled “Other.” The contrast underscores just how crucial the new category is to assessing the needs of the AAPI community. The AAPI homeownership rate also lagged behind the national rate, which was 63.5 percent.
“With this new data, researchers will be able to analyze the barriers to housing facing the AAPI community and preventing it from achieving high levels of homeownership,” the report states.
The AAPI community represents an immense opportunity in real estate. The AAPI population is more than 21 million strong—a figure expected to double by 2050—and will have a purchasing power of over $1 trillion by 2018. Twenty-seven states now have an AAPI population larger than 100,000, with Los Angeles County, Calif., Honolulu County, Hawaii, and Santa Clara County, Calif., the counties with the highest AAPI concentrations. By 2024, 1.8 million more Asian households will be formed.
AAPI also boast the highest employment rate of any race or ethnic group, at 61.3 percent—with the highest average earnings, to boot.
All of these indicators make for a group that is able, ready and willing to participate in the real estate market. Asians submitted the second-highest conventional purchase loan applications (and contributed to the second-highest conventional purchase loan originations) in 2015. Fifty-two percent of all Asian real estate capital was invested in the U.S. in 2016, with China the biggest purchaser of U.S. homes, as well as the biggest spender, with an $831,000 average home price.
“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 offer more value to customers,” stated Geoff Lewis, president of RE/MAX, LLC, which presented the report.
Homeownership in the AAPI community, however, is not without challenges. Twenty percent of AAPI homeowners report experiencing discrimination while homebuying—in fact, Asian homebuyers who contact real estate agents about listings report learning about 15 percent less homes and being shown 19 percent less homes than whites. A study by the Department of Housing and Urban Development (HUD) confirms those findings, reporting one in five in the AAPI community experiences discrimination while home-buying or renting.
Student loan debt is another potential roadblock. AAPI are the fastest-growing group of college students, projected to grow 35 percent over the next 10 years. As more AAPI undertake postsecondary education, the burden of student debt, especially when it comes to saving for a down payment, will become heavier, dragging down household formation.
“The student debt crisis and its impact on homeownership will have a profound impact on the younger generation of would-be homebuyers,” states the report. “As more and more AAPI go to on to pursue higher education…the stringent underwriting requirements related to debt-to-income ratio will keep many from achieving the American Dream for years to come as they work to pay off their student loans.”
The category change is a major step forward toward addressing these and other issues, now with the possibility of implementing truly effective solutions based on reliable data.
“As more research disaggregates data for the AAPI community, a clearer picture will be painted for policymakers to understand the issues affecting us,” AREAA National Chair Vicky Silvano said in RISMedia’s Real Estate magazine. “I am proud to have been a part of this movement.”
For more information, please visit www.areaa.org.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at firstname.lastname@example.org.
For the latest real estate news and trends, bookmark RISMedia.com.