API households have highest housing payment burdens, report finds
By Ryan General
September 8, 2023
Asian and Pacific Islander (API) homeowners in the U.S. face significant challenges in achieving and maintaining homeownership, according to a new report.
Diverse community: Real estate marketplace Zillow’s report, which was published in May, highlighted that the API community represents a tapestry of various national origins, resulting in growing disparities in homeownership rates and household incomes.
These disparities range from under 40% to over 75% in homeownership rates and median household incomes spanning from just over $50,000 to $140,000. While this diverse landscape underscores the multitude of experiences and challenges within the API community, common barriers persist among these households.
On achieving homeownership: According to the report, despite higher incomes on average, API community members grapple with the highest housing payment burdens among all racial groups. Their mortgage applications are denied more frequently due to factors like debt-to-income ratios, insufficient cash and, specifically for Asian applicants, collateral.
On maintaining homeownership: APIs also exert considerable effort to sustain homeownership as these communities allocate a substantial portion of their income toward mortgage and rent payments. Although Pacific Islander households may have relatively lower mortgage rates, they have even higher payment burdens than Asian households, primarily due to higher loan-to-value ratios.
Nicole Bachaud, senior economist at Zillow, said in a statement that the concentration of API community members in expensive housing markets contributes to their housing cost burdens.
“Many API-led households live in pricier coastal metros like New York, San Francisco, San Jose, and Los Angeles, which possibly helps drive up demand and thus the price home buyers can expect to pay. Residents of these communities tend to prioritize living in these areas because they offer a strong sense of community, access to cultural amenities and proximity to ethnic enclaves where they can find familiar cultural and social networks that often help facilitate area jobs.”
Links to prejudice and discrimination: The report also noted how prejudice, discrimination, geopolitical tensions and policies have exacerbated challenges for different communities. Such issues often trickle down to affect individuals and communities on a local level, creating additional obstacles for these households seeking stable housing.
Some policies aimed at restricting foreign property ownership also add unintended consequences for affordability and homeownership within the API community. Due to people’s perception of the “model minority” myth, these struggles are often overlooked. The report urges policymakers to recognize the increased discrimination and barriers that API households face and ensure progress toward housing equity and inclusivity in the future.
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