In addition to the reports that Asian Americans were unemployed longer during the recession, it turns out that Asian Americans lost more equity than other Americans with the housing downturn in recent years. Which may make you wonder how it’s possible Asian Americans are the most optimistic group regarding the American Dream.
A new study by the Asian Real Estate Association of America (AREAA) and the UCLA Asian American Studies Center found that home ownership by Asian Americans hit a high of 60.3 percent in 2007 (compared with 67.4% of the entire U.S. population in 2009) before coming back down to 59% in 2009.
“The initial gains in homeownership for Asian Americans were lost during the current real estate downturn and it also exposed them to greater financial risk in terms of equity loss,” said Kenneth Li, Chairman of AREAA.
The median property value of homes owned by Asian Americans decreased by -$42,900 from 2007 to 2009. For Native Hawaiians and Pacific Islanders (NHPI) decrease was even larger at -$47,000. Nationwide the median loss was only -$9,100. It’s believed that Asian Americans and NHPIs suffered higher equity loss because these populations are generally concentrated in geographic areas where the housing downturn hit the hardest.
Asian Week provides some additional insight to why Asian Americans suffered greater losses:
Another factor affecting homeownership for AAPIs is their significant language barriers. According to the study: “The lack of English language proficiency continues to be a significant barrier, if not the most significant barrier, to homeownership among Asian Americans.” Findings showed that 71 percent of Asian Americans speak a language other than English at home, compared with 20 percent of the total population. Additionally, 2009 data showed that 32 percent of Asian Americans “speak English less than very well” compared with nine percent of the total population.
In fact, the study broke down home ownership based on language spoken at home and found that home ownership lagged in every Asian American population where English wasn’t the primary language. Those same Asian Americans also found it more difficult to obtain loan modifications making them more susceptible to losing their homes.
I’m not quite sure why, but for me, owning my own home has always been the definition of success, so when I graduated from college, it was one of my primary goals to purchase a home and so I was able to achieve it at a relatively young age. The recent recession and housing downturn has hit my family pretty hard, but not as hard as others who have lost jobs and homes. While I didn’t lose my home, I can see how it would have been easily possible these past few years.
So while, the American Dream may include owning your own home, for many Asian Americans this dream has been harder to attain.