On average, Asian Americans have higher educational attainment and household income than any other racial and ethnic group in the United States. But they still lag behind white Americans in terms of homeownership, according to a new study from Realtor.com.
The study, released in honor of Asian American and Pacific Islander Heritage Month, found that homeownership rates for Asian Americans grew to 61.2% during the 2021 fourth quarter from 59.5% the previous year — an impressive gain, considering that all other racial/ethnic groups saw homeownership rates decline over the same period.
Even so, homeownership among Asian Americans still lags well behind the 74.4% rate for white Americans and the overall national rate of 65.5%.
Realtor.com, citing data from The National Coalition for Asian Pacific American Community Development, said that part of the gap can be attributed to language barriers in the buying process. Another challenge is the prevalence of multigenerational living among Asian American households, which requires them to spend more money on housing than other groups.
A separate report from the Consumer Financial Protection Bureau found that Asian American borrowers typically live in comparatively expensive metro areas, resulting in higher average loan amounts than their peers.
“Because AAPI buyers tend to live in high-cost housing markets, the bar for becoming a homeowner is raised, often requiring a larger down payment, higher income and greater borrowing,” Realtor.com Chief Economist Danielle Hale told GOBankingRates in an email.
Historically low mortgage rates in recent years likely accounted for rising home homeownership among Asian Americans in 2021. But with mortgage rates moving higher in 2022, many AAPI families might be priced out again.
Within the Asian American population, the rate of homebuying is highest for millennials, the youngest generation studied, and lowest for the silent generation, the oldest generation studied, according to Realtor.com. Generation X ranked second in the homebuying rate among Asian Americans, followed by baby boomers in third place.
The COVID-19 pandemic hit older generations of Asian American buyers hardest, while the buying patterns of millennials were less impacted. This is largely because the timing of the pandemic coincided with peak home-buying years for millennials.
Among millennials, Asian Americans tracked fairly closely to other racial/ethnic groups in their rate of homebuying during the pandemic as compared to pre-pandemic.
The Realtor.com study also found that recent homebuying rates are higher for Asian American women than Asian American men.
More From GOBankingRates