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Special Reports
Emerging Markets
Asian-American Niche Holds Unrecognized Potential
By Amilda Dymi
Asian Americans are another fast-growing minority group that fuels homeownership
growth across the country and the potential for even more growth going forward, a recent study suggests.
Since 2000, the homeownership rate among Asian Americans has increased faster than the rates of any other minority
group from 52% to nearly 60%, according to "A New Path to Homeownership for Asian American Home Buyers,"
the first up-to-date analysis of demographic trends within the Asian American consumer market.
Conducted by the Asian Real Estate Association of America and the UCLA Asian American Studies Center, this study
of housing patterns among Asian Americans also found that "their income and credit profile suggest that this
growth will continue into the future."
The study found that although, by 2004, the homeownership rate for Asian Pacific Islanders reached 60%, it still
lags behind the national homeownership rate of 69% and the 76% rate for non-Hispanic whites. However, in 2002,
the Asian Pacific Islander homeownership rate among naturalized-citizen householders was at 70.3% and also higher
than the 56.5% of their native-born Asian Pacific Islander counterparts.
Another interesting finding indicates that in 2002 81% of the Asian-born naturalized-citizens who entered the U.S.
in 1974 or earlier were homeowners, compared with 66% of those who entered in 1975 or later. "Studies like
this one help the industry and the public gain a better understanding of the homeownership process in the Asian
American community," said Dwight Robinson, senior vice president of Freddie Mac, upon the release. "The
knowledge gained from this study is a step toward helping the financial services industry learn how to better serve
this important, growing market." "The findings from this study shed new light on this dynamic segment
of the housing market, and provide a challenge to the entire housing industry to work creatively to solve the unique
homeownership challenges facing Asian American consumers," AREAA chairman Allen M. Okamoto said upon the release
of the study.
More specifically, AREAA said, the study focused on key demographic trends such as population, homeownership and
housing, income, language, and immigration to gain a better understanding of the socioeconomic status of Asian
Americans across the nation.
Federal Housing Administration commissioner Brian Montgomery said, "For FHA, this study highlights the need
for additional product flexibility, such as that proposed in the Expanding Homeownership Act of 2006, to reach
all segments of the Asian American homebuying market. We plan to work closely with AREAA to design and offer innovative
and suitable insurance products to increase homeownership opportunities for Asian American families."
Study findings include data from a national survey of real estate, housing and mortgage industry professionals,
which was conducted to better understand the Asian American housing market and the perceptions of those serving
Asian homebuyers in the real estate and mortgage industries. Survey topics, AREAA said, focused on identifying
which sectors of the Asian American community struggle the most with homeownership, common obstacles, the role
of real estate professionals, and service quality offered to Asian Americans by existing private and government
homeownership assistance programs.
The study found that 65% of respondents claimed it was "very important" to offer culturally sensitive
loan programs to immigrant and low-income potential borrowers, while 57% of participants felt they were "not
familiar" with cultural or language-based government-sponsored or nonprofit homeownership programs. Also,
50% of respondents reported that they think lenders do "not often" incorporate homebuying counseling
as a standard in their mortgage products.
Findings are based on disaggregated census data on Asian Americans at the national, state and regional level, focusing
on the top 25 metropolitan areas with the largest Asian American populations. These areas include Atlanta, Boston,
Chicago, Dallas, Denver, Detroit, Fresno, Honolulu, Houston, Las Vegas, Los Angeles, Miami, Minneapolis, New York,
Norfolk, Philadelphia, Phoenix, Portland, Sacramento, San Diego, San Francisco, Seattle, Stockton, Tampa and Washington.
The study found that in 2004, over half of the Asian population lived in three states, 34% in California, 15% in
New York and 5% in Hawaii. Meanwhile, settlement patterns at the regional level show a greater number of Asian
Americans moving to metropolitan areas in the South, such as Asian Indians and Vietnamese in Dallas, Koreans and
Vietnamese in Atlanta, and Vietnamese in Houston.
Founded in 2003, AREAA is a national professional trade organization dedicated to closing the homeownership gap
facing the Asian Pacific American community. It conducted the study in cooperation with UCLA and sponsors Freddie
Mac, the National Association of Realtors and Bank of America.
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