Asian Americans, Pacific Islanders, and the Homeownership Race Gap
7 min read

By Lauren Rosales, Content Writer

Our country has an undeniable history of housing inequality. The redlining practices of the 1930s which segregated cities and likewise barred nonwhite, non middle-class demographics from the budding suburbs, have had a lasting effect on the nation’s communities and continue to impact our society.

In the larger conversation about homeownership race gaps, one demographic about which we tend to hear a bit less is Asian Americans and Pacific Islanders (AAPI). While the homeownership rate of White Americans is 74%, that of Asian Americans is just under 60%. Yet as the fastest growing racial or ethnic group in the United States since 2000, AAPI have also experienced the largest homeownership rate increase from 1980 to 2019.

However, the exceedingly diverse nature of the AAPI community is often overlooked. “Asian American and Pacific Islanders” is a broad label that identifies people from over 40 different countries. Between subgroup demographics, both wealth and homeownership inequality is pervasive.

The Urban Institute, a nonprofit research organization, published a 2021 analysis of the six Asian ethnic groups with the largest populations in the United States, and their homeownership statistics and trajectories. Vietnamese people, they found, have the highest homeownership rate among AAPI groups; however, they also have the most mortgage denials and the lowest median home values. The Urban Institute speculates that the higher homeownership may be due to mass immigration after the Vietnam War. In 2017, only 26% of Vietnamese immigrants had a bachelor’s degree, or higher–compared to 31% of immigrants overall. In their report, the Urban Institute illustrates a domino effect where lower educational attainment results in lower-paying employment, which in turn results in being unable to afford more expensive housing.

Such nuances are completely missed when statistical analyses squash each unique AAPI group together under a single label. In addition to which, that practice erases the individual histories and diverse range of experiences that belong to each separate ethnicity. For example, the Urban Institute report describes the key historical context which informs the conspicuously low homeownership rate for Koreans over the age of 65 (55%, roughly 15 percentage points lower than other AAPI groups)--Korea’s rapid transition from “a low-income to high-income country” meant Korean immigrants prior to the 1990s tended to have lower incomes. Younger Korean individuals who have immigrated more recently have higher incomes, and thus their homeownership rate more closely resembles that of other AAPI groups of the same age range.

For decades, the “model minority” stereotype has allowed the perpetuation of a myth that, thanks to an ingrained hard work ethic, Asian Americans have “made it”; in other words, they no longer experience forms of prejudice or racism. When studies ignore or overlook the intricacies of subgroups within the AAPI label, they further sanction this assumption and ultimately ensure that it remains uninterrogated, normalizing it into accepted “fact.”

The statistics may initially seem to support this myth. Educational attainment and household income are two key factors that contribute to the rate of homeownership, and AAPI as a whole, according to aggregated data, have the highest rate of both. According to the Urban Institute, in 2019, 43% of Asian people had bachelor degrees and an entire third of Asian households had an income of over $150,000. Comparatively, 29% non-Hispanic white people held bachelor’s degrees and 22% of white households had incomes exceeding $150,000. However, the Urban Institute points out that if one controls specifically for income and education level, the rate of homeownership for AAPI is exceedingly lower than the white population; for example, white households without high school diplomas have a home ownership rate of 13 percentage points higher than that of AAPIs. At each income level, AAPI homeownership rates are much closer to other minority groups. And as we have seen, the homeownership rate is disparate between subgroups within the AAPI community as well due to extreme wealth gaps.

The home is frequently one’s largest financial asset, and the most solid foundation on which a household can build their wealth. This wealth-building can take the shape of extracting equity to pay down debt, increasing the home’s value with renovations, or diversifying one’s financial portfolio via additional outside investments. Unsurprisingly, continued homeownership gaps of the past several decades have resulted in a dearth of intergenerational wealth amongst people of color in all minority groups. There are some challenges and barriers to homeownership that are experienced particularly, or more frequently, by AAPI groups; for example, a great deal of cost burdened AAPI households are of Limited English Proficiency. According to an article for the UCLA Center of Neighborhood Knowledge, 54% of such households are Limited English Proficient, compared to only 9% of cost burdened White households. In addition, AAPI groups are more likely to live in multigenerational households. The same report specifies that Asians are four times more likely to do so, and Native Hawaiians and other Pacific Islanders (NHOPI) are seven times more likely, resulting in overcrowding and extreme cost burdens.

The National Coalition for Asian Pacific American Community Development (National CAPACD, pronounced “National Capacity”) has developed a Housing Counseling Network which contains 17 organizations serving AAPI communities across 15 geographic areas. Housing Counseling Agencies like these provide assistance to renters, homeowners, and potential homebuyers–all of low-to-moderate income–who need help navigating housing issues from a source who can speak their native languages and is familiar with their individual cultures. Such agencies are a vital source of support in the ongoing and often invisible struggle for housing equality for AAPI communities.

Ultimately, this country has a long way to go before housing inequality is a thing relegated to our past and not our present. As the population of AAPIs continues to climb, it is key that researchers and policymakers break from the problematic tradition of lumping all included ethnicities into a single category, as it leads to misleading aggregated data which erases diverse identities and obscures those who would benefit from targeted assistance.

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