Closing the Gap: Pros Can Help Lift Asian-American Homeownership

As a group, on paper, Asian Americans and Pacific Islanders (AAPI) are well-positioned to qualify for mortgages and buy homes. The U.S. AAPI population has a higher median income ($70,000) and better credit score (755) than any demographic in the country. Yet at 57.6%, the homeownership rate for Asian Americans is much lower than the national level of 65%. For Pacific Islanders, the rate of homeownership falls to 42.3%.

For the AAPI population, and real estate agents with the skills to guide them, that disparity represents a massive opportunity. Elevating AAPI homeownership to the national rate would mean thousands more people in their own homes, and thousands more sales for professionals who serve the community.

To help close the gap, RE/MAX sponsored the 2019-2020 State of Asia Report produced by the Asian Real Estate Association of America (AREAA). The report offers a close look at the barriers to homeownership for AAPI, as well as insights into how agents can break them down.

Lisa Nguyen, an agent with RE/MAX Professionals in Lakewood, Colorado, says the desire to own is strong within the AAPI community. 

“They definitely want to own – it’s the American dream!” says Nguyen, who is also President of the Denver Area Chapter of AREAA.

Supported by data in the report, Nguyen sees three notable obstacles for members of the AAPI population. Skilled real estate and mortgage professionals can help address them all. Issue No. 1: lack of credit history and/or verifiable income, which both derail AAPI loan applications.  

“In Asia the banking systems are different, and there isn’t as much trust in banks as there is here,” Nguyen says. “People have money, but they may hide it in a mattress or somewhere else. That means they may not have established the type of credit typically required for a loan.”

Nguyen adds that many AAPI individuals are entrepreneurs. “If you own a business, you’re spending money on payroll and other expenses. On paper it can look like you don’t make much money. With so many members of the Asian community owning their own businesses, it can be a barrier they face.”

A second big issue: language barriers, either real or perceived. Although access to translated loan documents has increased, the AREAA report points out that some financial terms don’t translate directly from English to another language. Agents like Nguyen, however, are able to assist.

“I experience this all the time with clients who say, ‘I want to get a loan, but the paperwork is not in my native language,” Nguyen says. “A younger family member may be able to help, but they might not be well-versed enough in the loan process to translate everything for the borrower.”

Ensuring all members of the family are able to understand loan documents is important, especially as the AREAA report states multi-generational loans are more common in the AAPI community then others.

Language can play into the third issue, too. Unfortunately, discrimination remains a barrier for potential AAPI homebuyers. “It’s common for people to see your name and assume you can’t speak English well,” Nguyen said. “Many lenders look at certain names differently. So the diversity and inclusion piece can be another big factor.”

Supporting diversity in homeownership is important to the RE/MAX vision of sustainable homeownership for all. Like Nguyen, many agents feel aligned with that vision and see the tremendous business opportunity connected to it. The more they can help people clear the barriers and realize the power of homeownership, the greater the impact on their own businesses. That sort of agent has a place at RE/MAX, where actions like supporting AREAA and sponsoring the State of Asia Report demonstrate a commitment to inclusion.

“We know the dream of owning a home isn’t limited by race, ethnicity or heritage,” said Mike Reagan, RE/MAX Senior Vice President of Business Alliances and Industry Relations. The State of Asia Report is a powerful resource to help agents have a deep understanding and respect for diverse populations and cultures.”

To learn more, download the 2019-2020 State of Asia Report here.