A recent study by CAPACD shows that language barriers in the buying process and the prevalence of multigenerational living, which often coincides with higher housing cost burdens, are among the challenges faced by Asian American households nationwide.
The outbreak of the pandemic also changed the trajectories of Asian American homebuyers. During the first half-year, the buying pace of Asian American homebuyers slowed significantly, ultimately lagging behind their non-Asian counterparts over this period. The average Asian American HSI dropped to 109.5, 8.1% lower than their pre-pandemic levels and 9.5% lower than their non-Asian peers.
Home Sale Index: Asian vs. Non-Asian American Homebuyers
The immense increase in anti-Asian crimes may have contributed in the halted 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. For example, between March and September 2020, 67 anti-Asian hate crime events were reported in California, the state with the highest Asian American population, a 139% increase from the same period in 2019.
Although Asian American homebuyers experienced significant challenges, they are the group that had the largest homeownership rate increase in recent years. For example, between Q4 of 2020 and Q4 of 2021, the homeownership rate of Asian American households increased from 59.5% to 61.2% —up 1.7 percentage points, while all other racial groups saw homeownership rate declines over the same period.
The impact of the pandemic was felt relatively equally by male and female Asian American buyers, with male and female average HSI’s of 98 and 103, respectively, between March and July 2020, down significantly from pre-pandemic. However, post-pandemic, Asian American female homebuying recovered more quickly than for Asian American males. In June 2021, Asian American homebuying peaked for both males and females.
Asian American females saw a peak HSI of 197.3, nearly two times the rate of homebuying as compared to the baseline in March 2019, and almost two times the rate in June 2020. On average, between July 2020 and December 2021, Asian American females had an HSI 8% higher (157) than Asian American males (145.5). This means that the growth rate in home purchases by Asian American females grew more than that for males and that the gap widened in the housing market’s pandemic recovery.
The timing of the pandemic coincided with peak home-buying years for millennials, resulting in millennial first-time home buyers entering the market at higher rates than other generations. However, the generations start to split apart at the onset of the pandemic in March 2020, and from there forward, millennial Asian Americans are seeing greater growth in homebuying than other generations of Asian Americans.
Within the Asian American population, the rate of homebuying in the observed time period is generally highest for millennials, and lowest for the Silent generation, with Gen X and Boomers falling in line according to age in between. The pandemic hit older generations of Asian American buyers hardest in May 2020, with the Silent generation, Boomers and Gen X slowing buying to HSI’s of 74.0, 76.3 and 80.8. Millennial buying behavior was impacted slightly, only reaching an index of 90.4.
In the months following the onset of the pandemic, all generations recovered, but millennials outpaced the older generations. Between August 2020 and December 2021, Asian American millennials sustained an average HSI of 159.1, compared to Gen X’s index of 148.9, Boomers’ index of 145.0, and Silent generation’s index of 145.5. Millennials grew homebuying activity by 59% over their pre-pandemic pace while other generations saw activity grow by only 45% to 49%, on average.
After the early-pandemic stage, Asian American millennials started buying homes at a faster-growing rate than non-Asian American millennials, reaching a peak HSI of 196.5 in June 2021, as compared to the non-Asian American millennial peak of 175.5 in the same month. Between August 2020 and December 2021, Asian American homebuyers had an average HSI of 159, which translates to an average nearly 60% more buying activity compared to the March 2019 baseline. In the same timeframe, non-Asian American millennial buyers had an average HSI of 144.4, a growth rate of less than 45% over their March 2019 baseline, lagging the improvement in Asian American millennials’ rate of homebuying by 9.2%.
Home Sales Index: Asian vs. Non-Asian American Millennials
To read the full report, including charts and methodology, click here.