Characteristics of Multicultural Homebuyers

Here are several important characteristics that distinguish foreign-born and minority homebuyers in the United States:

• Immigrant households tend to be larger, averaging 3.3 people vs. 2.5 for native-born households, according to NAR’s 2002 report, “ Housing Opportunities in the Foreign-Born Market.” (PDF file)
  
• Perhaps because foreign-born homebuyers still tend to live in expensive urban areas, they also are likely to purchase more expensive homes than native-born buyers. The median housing price for first-time foreign-born homebuyers is $150,000; the comparable number for native buyers is $100,000, according to Rachel Bogardus Drew’s August 2002 report, “ New Americans, New Homeowners: The Role and Relevance of Foreign-Born First-Time Homebuyers in the U.S. Housing Market” for the JCHS. (PDF file)
  
• Foreign-born first-time buyers also tend to make larger downpayments. In fact, their median downpayments of 7 percent is almost double the 4 percent median of native first-time homebuyers, according to the U.S. Census Bureau.
  
• This isn’t to suggest that minority residents face no obstacles in purchasing a home. A major obstacle is money. In 2002, nearly 25 percent of foreign-born households earned less than $20,000, compared with 22.3 percent of native workers, according to the U.S. Census Bureau.
  
• As a result, foreign-born residents typically allocate more of their income to housing. For instance, 39 percent of foreign-born residents say that their mortgage payments consume at least 30 percent or more of their income vs. 28 percent of native-born homebuyers, according to NAR’s report.
  
• Currently, the homeownership rate among African American and Hispanic households, at 49.4 percent and 47.7 percent, respectively, lags that of the nation. Overall, 68.6 percent of American households are homeowners, according to the U.S. Census Bureau.
  
• Members of minority groups in the United States tend to be younger than the rest of the population. “A much larger share of the minority population is under 40,” says Michael Carliner, economist with the National Association of Home Builders in Washington, D.C. As a result, they’re steadily moving into what typically are the prime homebuying years of 25 to 44.
  
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