Economist's Commentary: June 11, 2008

Asian/Pacific Islander Home Buyers, Part One: 

High income households purchasing homes at the higher end of the market (First one of the two articles on Asian/Pacific Islanders)

By Harika "Anna" Barlett, NAR Research

According to the U.S. Census Bureau, Asian/Pacific Islanders make up about 4.5 percent of the U.S. population, or 13 million residents. Since 2000 this group has grown by 23 percent. Among recent home buyers surveyed by NAR in 2007, 4.6 percent identified themselves as Asian/Pacific Islander. Asian/Pacific Islander home buyers have some distinctive characteristics as revealed in this survey. Knowing particular characteristics and requirements of Asian/Pacific Islander buyers and sellers can help REALTORS® develop customized services to better meet the needs of this particular group. This first of two brief articles provides information on demographic characteristics and home choice of Asian/Pacific Islander home buyers.

Based on the 2007 NAR Profile of Home Buyers and Sellers, the typical Asian/Pacific Islander home buyer was 37 years old, two years younger than the typical recent home buyer. The median household income among recent Asian/Pacific Islander home buyers was $83,700, much higher than the median of $74,000 among all home buyers.

Married couples constituted 69 percent of recent Asian/Pacific Islander home buyers (62 percent among all buyers), while 17 percent were single females, and 6 percent were single males (20 percent and 9 percent, respectively, among all buyers). The percentage of married couples was higher among first-time Asian/Pacific Islander home buyers (60 percent), compared to all first-time buyers (51 percent). Of Asian/ Pacific Islander first-time home buyers, 22 percent were single females and 9 percent were single males. More than half of Asian/Pacific Islander home buyers (53 percent) had children under the age of 18, residing in household, compared to 40 percent of all recent home buyers. Asian/Pacific Islanders also had a higher tendency to have more than one child.

A majority of Asian/Pacific Islander home buyers (68 percent) were born outside the United States, and 58 percent of them primarily spoke a language other than English. However, English was the primary language spoken in the households of nearly all Asian/Pacific Islander home buyers who were born in the U.S.

Nearly half of recent Asian/Pacific Islander buyers (48 percent) were first-time home buyers, compared to 39 percent of buyers overall. While "desire to own a home of my own or establish household" was the most frequently cited primary reason for purchasing a home among all buyers (33 percent), it was a more dominant reason among Asian/Pacific Islander home buyers (42 percent). One-third of Asian/Pacific Islanders purchased a newly constructed home. In comparison to home buyers in general, Asian/Pacific Islander buyers were somewhat more likely to purchase a home in an urban area or central city (26 versus 16 percent), and a townhouse/row house or a condo in a five or more unit building (26 versus 18 percent).

The median size of the home purchased by Asian/Pacific Islander buyers was larger than the median among all buyers (2,000 square feet, compared to 1,810), and the median home price was much higher ($357,000, compared to $215,000 for the homes purchased from mid-2006 to mid-2007). The following table compares the differences in median home prices between Asian/Pacific Islanders and all home buyers by various subgroups:

The second article in this series discusses Asian/Pacific Islander home buyers' home search process, home buying method and what they expect from real estate agents when buying and selling a home.  It will appear on Monday, June 16.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

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