Asian Americans are often perceived as enjoying a high degree of economic and educational success. Indeed, most data indicate that Asian Americans have among the highest household income and home ownership rates in the country.
However, other data show that significant segments of the Asian American community continue to face social, economic, and cultural barriers and fail to realize the dream of home ownership.
A recent study by the Asian American Real Estate Association and the UCLA Asian American Studies Center revealed that Asian Americans have experienced the fastest growth in home ownership attainment of any population across the nation. Nearly 60 percent of Asian Americans owned a home in 2004.
The study, titled "A New Path to Home Ownership for Asian American Home Buyers," also found that Asian American home ownership rates increased in 19 top metropolitan areas in the nation, most notably Minneapolis-St. Paul, Boston and Fresno, from 1990 to 2000.
Why do Asian Americans have the fastest home ownership attainment? Immigration is still a key driver. In 2002, the home ownership rate for Asian and Pacific Islander naturalized-citizens was 70 percent compared with 57 percent for their native-born counterparts. Many Asian Americans who entered the United States before 1974 are now able to either own more than one home, move up to a larger and more expensive home, or both.
A greater number of Asian Americans also have become real estate and mortgage professionals over the past five years. This has helped make it easier for Asian Americans to understand the complex process of buying a home. Moreover, there has been an increase in the amount of homebuyer education materials translated into various Asian languages.
Nevertheless, the study's findings also revealed some disturbing trends. In 2004, Asian American homeownership rates continued to lag behind the 69 percent rate for the national population and the 76 percent for non-Hispanic whites.
Significant disparities also exist among Asian groups in metropolitan areas. In 2000 in Los Angeles County, for instance, Chinese Americans had the highest rate of home ownership while Korean Americans had the lowest, or 40 percent.Most of the home ownership growth of Asian Americans also is occurring in places outside of the Los Angeles metropolitan area and other large cities. Drawn by affordable housing, there are increasing numbers of Asian Indians in Dallas, Koreans in Atlanta, and Vietnamese in both cities, as well as Houston.
In high-priced Los Angeles, however, the Asian American home ownership rate had not increased significantly from 1990 to 2004. Although the rate increased slightly from 2000 to 2004, the rate was still 54 percent, as it was in 1990.
According to a national survey of real estate, housing, and mortgage industry professionals included in the study, the top five barriers to home ownership among newly arrived Asian immigrants are language and cultural, a complicated home-buying process, unverifiable income, lack of a credit history and a lack of affordable housing.
Banks and lending institutions must develop broader methods of education and outreach by offering financial literacy programs as well as culturally sensitive loan programs to immigrants and low-income potential borrowers.
Home-buying programs that educate and inform underserved clients about the process in a language or cultural manner they understand will be of great assistance to the first-time Asian American homebuyer.
The population and buying power of the Asian consumer market is expected to increase rapidly. Consider that Asian Americans are a relatively young population. The national average age of Asian Americans is 31, so there are many potential homebuyers in the Asian American population.
As our study demonstrates, the Asian American consumer market is a rapidly growing market that housing professionals, mortgage professionals, and policymakers can no longer ignore.
Melany Dela Cruz is the study's author and assistant director of the UCLA Asian American Studies Center.
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