The Asian American and Pacific Islander demographic could be poised to 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 incomes are expected to have a big impact on the U.S. economy and housing market, the report says.
AAPIs also comprise some of the largest gains among any other minority group in homeownership, the report shows. They tend to live in multigenerational homes, with researchers noting that their homeownership numbers may 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% 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, the report notes. 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% from 2004 to 2017, the report shows.
Relocating to the South
The AAPI population is increasingly heading to the South, while 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% between 2000 and 2010 in the Southern region of the U.S., according to the report. Some of the fastest growing AAPI populations are in North Carolina and Georgia, which respectively saw an 89.5% and 85.6% 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 home buyers has increased 27% 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%, compared to 58.1% of Asian, native Hawaiian, and Pacific Islander; the rate for blacks was 42.9% and for Hispanics was 46.9%, according to the report.
“High incomes and rates of education, high credit scores, and low loan-to-value and debt-to-income ratios make AAPI typically well positioned to be homeowners,” according to the report. “However, AAPI homeownership still falls behind national average and significantly behind non-Hispanic whites. 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)
