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The pandemic conjured the perfect storm of homebuying conditions that drove the market to record heights. No group capitalized on this opportunity more than Asian American and Pacific Islanders homebuyers – particularly females and millennials.

From the fourth quarter of 2020 to the fourth quarter of 2021 Asian Americans were the only racial group to increase its homeownership rate, increasing it from 59.5% to 61.2%, according to a study by Realtor.com.

While the Asian American homeownership rate is still lower than the national homeownership rate (65.5%) and the white homeownership rate (74.4%), raising it 1.7 percentage points in 4 quarters is substantial.

Based on Realtor.com’s Home Sales Index (HSI), Asian American homebuying activity jumped 30.8% between October 2020 and December 2021 and was 19.6% faster than non-Asian groups.

With this push, Asian Americans went from making 3.7% of home sales to 4.6%. Asian American homebuyers noticeably narrowed the housing gap with white-only households in a pandemic buying spree.

Record-low mortgage rates opened the window for Asian Americans to buy homes during the pandemic. However, this group’s homeownership success story was not – and is not – without substantial hurdles.

Most notably, 74% of Asian American and Pacific Islander women reported facing anti-Asian racism and discrimination in the 12 months prior to March 2022, according to research by the national Asian Pacific American Women’s Forum. In report for Realtor.com, economist Jiayi Xu said the fear of discrimination likely plays a role in housing decisions.

“The immense increase in anti-Asian crimes may have halted the home buying process for some. Fears of being isolated from larger Asian American communities by moving to more affordable areas like smaller cities and the suburbs likely took otherwise viable options off of the table, derailing plans.”

Xu also cited language barriers and the prevalence of multigenerational living as hurdles to Asian American homeownership.

Related reading: 5 Takeaways from the 2022 Hispanic Real Estate Survey

Given these barriers, Asian Americans tend to live in more expensive metro areas with higher housing payments. Record-low mortgage rates in 2021 lowered these payments and provided new homeownership opportunities, which Asian American buyers jumped on.

Asian American millennials and females led the homebuying charge during the pandemic. In July 2020, the average HSI for females was 8% higher than for males.

Millennials – a massive generation of which the largest subset is just aging into its prime homebuying years – were especially quick to jump on low mortgage rates during the pandemic. Among Asian Americans, millennial homebuying activity increased by 59% during the pandemic compared to 45% to 49% for other generations.

Not only did Asian American millennials outpace other Asian American generations, they outpaced millennials in other racial groups. Early in the pandemic, Asian American millennials had an HSI below that of non-Asian American millennials. But between August 2020 and December 2021 Asian Americans millennials outpaced their peers by 9.2%.

The recent success of Asian American homebuyers is remarkable, especially given the significant hurdles facing this demographic. However, it’s important to note that this success coincides with low mortgages rates and remote work opportunities brought on by the pandemic. It will be interesting to see whether Asian Americans can continue increasing homeownership rates with the additional challenges of rising mortgage rates and home prices.

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