Homeownership rates among minority groups have always lagged behind that of whites, but one group — Asian Americans, Native Hawaiians and Pacific Islanders (AANHPI) — is closing that gap.
Freddie Mac’s June 2024 outlook on the economic, housing and mortgage markets revealed that over the past 20 years, the homeownership gap between AANHPI and whites narrowed by 6 percentage points. What’s more, demographic conditions point to that gap closing even more in the future.
The current rate of homeownership sits at 75% for whites and 62% for AANHPI. But the median age of AANHPI (37) is five years lower than that of whites, which puts more of them in the prime homebuyer age group. Considerably more AANHPI (45%) have a bachelor’s degree than whites (33%) and AANHPI are also slightly more likely to be married.
Added together, this leads to the AANHPI population having a considerably higher median income than whites; AANHPI income sits at $107,000 while whites are at $81,000.
“One key takeaway is that the AANHPI community is projected to keep growing as a share of the U.S. population,” the report reads. “Given that overall this group is younger and in the prime home buying age, as they grow older, get married and have children, we expect their homeownership rate to increase. However, housing costs are an issue affecting the homeownership rate of AANHPI as compared to whites.”
The numbers do not break evenly among races and nationalities within AANHPI. The demographic drivers for the cohort are even stronger among Indian Americans, which have a homeownership rate of 63%.
Indian Americans are younger (median age of 34) and have a higher share of people with bachelor’s degrees (59%). They’re also more likely to be married. This translates into a median income of $150,000, which is the highest among the AANHPI cohort and almost double the median salary of whites.
The data on Vietnamese Americans shows that this group has a considerably higher median age (45), a considerably lower share with bachelor’s degrees (29%) and the lowest median salary ($84,000) among AANHPI groups. Despite this, the homeownership rate is highest among AANHPI segments at 72%.
This can be attributed to legislation after the Vietnam War that helped refugees from Vietnam, Cambodia and Laos find housing, Freddie Mac reported.
The economic, housing and mortgage outlook report reinforces a number of recent trends. The GSE also expects a “modest” uptick in unemployment that could prompt the Federal Reserve to lower interest rates. But Freddie Mac expects mortgage rates to stay above 6.5% through the end of 2024.
