Asian American Community Grows to the Largest Share of the Minority Conventional Purchase Mortgage Market
Despite the Tighter Credit Market, Asian American Community's Use of Mortgage Credit Increases but Significant Obstacles Remain for Certain Segments of Asian Population
Nov 25, 2014, 10:00 ET
SAN DIEGO, Nov. 25, 2014 /PRNewswire-USNewswire/ -- A recent study, conducted by Marsha Courchane and Adam Gailey of Charles River Associates, and Rajeev Darolia of the University of Missouri, shows that while the Asian population "applied for and obtained a larger share of purchase money mortgages than [other minority] borrowers in recent years, measured in both number and dollars," there are still a great many challenges faced by the community when applying for a mortgage, (Borrowers from a Different Shore: Asian Outcomes in the US Mortgage Market).
Accounting for different socioeconomic levels, the study found that Asian Americans encounter many of the same challenges as other minority homebuyers. According to the study, Asian Americans have higher credit scores, lower debt-to-income ratios, and lower loan to value ratios, making them well positioned to obtain mortgage credit. Yet researchers believe these positive attributes can skew the data and mask the plight of the many less fortunate members of the Asian community. The study reports that Asian Americans face similar denial rates as similarly situated minorities, who are a more common research focus.
The study cautions against using an aggregated "Asian" ethnicity when conducting policy research, as it does not give a complete or accurate picture of the community. For example, persons from Korea have some of the highest levels of mortgage application denial of any minority group, while persons from Japan have lower denial rates than even non-Hispanic whites. The social construction of Asian Americans being the "model minority" often masks the fact that the community is made up of a diverse group of peoples who each experience their own struggles and challenges. According to Courchane, "These positive stereotypes can negatively impact social services provided, including the need for housing supports."
AREAA applauds the study and believes these findings highlight the need for more detailed research into Asian American homebuying trends. AREAA Chair Carmen Chong said, "Despite the significant growth of mortgage originations in the Asian American community, there has been very limited research regarding the lending patterns for Asian Americans. This research points to the higher denial rates for mortgage originations facing certain Asian subpopulations. To understand this issue and expand full access to mortgage credit for all Americans, we are looking forward to working with the lending industry to create equitable solutions for all Asian American borrowers."
With more than 14,000 members in 38 states, AREAA (www.areaa.org) is the only trade organization that represents the diverse Asian American community and gives Asian real estate professionals a voice in various policy and business discussions that affect the real estate market and Asian American Consumers.
Contact: Scott Berman
Asian Real Estate Association of America (AREAA)
760-918-9162
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SOURCE Asian Real Estate Association of America