The Asian Real Estate Association of America (AREAA) is celebrating its 15-year anniversary as an organization this year, recently releasing the 2017-2018 State of Asia America report that highlights accomplishments from the last year, as well as challenges the association continues to fight on behalf of the Asian American and Pacific Islander (AAPI) community.
“Over the last decade and a half, our members and leaders have fought with incredible passion and dedication to increase sustainable homeownership in the AAPI community and empower those who serve this dynamic community,” said Randy Char, 2018 AREAA president, in the report. “I could not be more proud of what we have been able to accomplish so far, or more excited about what’s yet in store for all of us.”
The AAPI community is the fastest-growing demographic in the U.S.—a segment of 22.5 million people that currently make up 6.9 percent of the total U.S. population, according to 2016 estimates. There was significant growth of 72 percent from 2000 to 2015, and a 7 percent increase since last year. And by 2055, they will be the nation’s largest immigrant group, accounting for 38 percent of all U.S. immigrants.
Their ever-growing presence should signal to the real estate community that this group will be playing a large role in the industry in the years to come; however, the AAPI homeownership rate continues to lag behind the national average by 7 percent, behind non-Hispanic whites by nearly 20 percent.
Additionally, AREAA reports that AAPI are shown 15 percent fewer homes than white Americans. The reason? Rampant discriminatory practices. This year, the housing industry as a whole is recognizing the advancements made by the Fair Housing Act of 1968, enacted 50 years ago. While the act has introduced momentous progress, discrimination challenges continue to arise. AREAA is maintaining a proactive mentality to help the AAPI community truly achieve equal and fair housing rights.
“While we have made great strides over the last five decades in regard to AAPI homeownership, we know that the fight is not yet over,” the report states.
Regardless of these obstacles, the AAPI community continues to search for the homeownership dream. Their strength is in their purchasing power, which increased by 257 percent since last year, exceeding $1 trillion. According to the report, experts estimate AAPI purchasing power to increase by another 33 percent by 2022, totaling $1.3 trillion.
What else is hindering the 17th largest economy in the world? Challenges such as student loan debt and a lack of language accessibility across the industry are deterring AAPI consumers from reaching their true buying potential.
There have been recent developments, however. In 2017, Fannie Mae and Freddie Mac added a Preferred Language Data Field in the Uniform Residential Loan Application (URLA), helping to gather data and make it easier to implement in-language services in the future. A lack of language options makes it difficult for a group in which 35 percent are Limited English Proficient and 20 percent of households are considered linguistically isolated, meaning no one over the age of 14 in the home speaks English “very well.”
“Despite our success last year in advocating for the inclusion of a Preferred Language Data Field on the redesigned URLA form, our work is not over,” the report states. “AREAA continues to push for greater access to in-language documents and services in the home-buying process.”
While AAPI tend to have high degrees of education—73 percent of Asian Americans between 18-24 (excluding Pacific Islanders) have completed at least some college, while 52 percent of those over 25 have completed a bachelor’s degree program or higher—student debt remains a major home-buying obstacle for 25 percent of AAPIs over 25, according to the National Financial Capability Survey cited in the report.
2017 also saw a policy change that could make it easier for student loan borrowers to purchase a home. The 1 percent rule enacted by the Federal Housing Administration (FHA)—which required lenders to assume debt repayment of at least 1 percent on all outstanding student loans, even if in deferment or forbearance—was removed. FHA lenders can now use their own judgement when analyzing how a person’s debt repayment impacts their home-buying ability.
What’s on the docket for AREAA in 2018? The search for alternative credit scoring methods that take different cultural and lifestyle backgrounds into account—such as rent and utility payments—while still maintaining the lending standards implemented after the housing crash, as well as continued realization of in-language services in the industry and the search for new ways to combat fair housing violations and discrimination within real estate, specifically instances that target the AAPI community.
For more information, please visit www.areaa.org.