The number of Asian-headed households grew by 83% in the past two decades, far exceeding Latinx, Black, and white household growth. But that broad success masks major challenges to homeownership in the highly diverse community. New Zillow research reveals the reality the Asian-American population—the smallest but fastest growing racial or ethnic group in the U.S.—faces regarding homeownership and income inequality. Asian-Americans continue to grapple with a difficult immigration environment, unequal access to opportunity and disparate educational backgrounds, the same barriers to housing that many other racial and ethnic groups face in the country.

Asian-American homeownership rate rose six percentage points from 2000 to 2019 to 59%, outperforming the near-flat or falling rates of other racial and ethnic groups and narrowing the gap with the 71% white homeownership rate. At the same time, median household income of Asian-Americans is the highest across all racial or ethnic groups in the U.S., and Asian-owned home values are 3.7% higher than typical home values.

"Asian households are often upheld as an economic success story—high incomes, homeownership rates, and other positive metrics point to a relatively prosperous demographic. But this highly diverse group also has the highest level of income inequality, and housing characteristics across Asian ethnicities differ greatly," says Zillow economist　Alexandra Lee. "As this population continues to grow—faster than any other racial or ethnic group—it will be crucial to recognize the disparities within the AAPI community to understand the opportunities and missed opportunities they are experiencing in the housing market."

The concentration of Asian households in more expensive coastal metros, such as New York, San Francisco, San Jose and Los Angeles, skew the median incomes and Asian-owned home values higher than the national average. However, Asian households are starting to shift away from these high-cost urban centers to more affordable metros, which may in turn boost homeownership rates and lower cost burdens, a trend likely to accelerate with the Great Reshuffling.

While most signs point toward prosperity, income inequality is rising most rapidly among Asian-Americans, and the income distribution among Asian households is currently the most unequal in the country. For example, in nearly half of the top 50 metro areas in the U.S., the typical Asian household income and Asian household poverty rates are higher than the metro median—a juxtaposing truth illustrating the reality of the diverse economic standing.

Incomes and homeownership rates among Asian households vary greatly by ethnic regions. East and Southeast Asians have the highest homeownership rates of more than 60%, and median household incomes approaching　$80,000, compared to the national median of $62,187. However, Pacific Islander homeownership rates are more in line with Black and Latinx rates, sitting at around 43% with a median household income of $65,000.

South Asians (including Indians, Pakistanis, Bangladeshis, Nepalese and Sri Lankans) have by far the highest incomes of any other regional group of over　$110,000. However, despite high-income levels, South Asians have relatively low homeownership rates of 55%.

When ethnic regions are broken down even further, sharper disparities exist. Taiwanese have the highest homeownership rate at 69%, followed closely by Vietnamese (66%) and Japanese (65%). Most of those are East Asian groups, but other East Asian groups have the lowest homeownership rates—just 30% of Mongolian-Americans own their homes.

The diverse motivations for immigration among the Asian community may help explain the wide-ranging economic situations. A vast majority of Asian-headed households are foreign-born (81%), and many Asian ethnicities are more likely to be moving to the U.S. for employment opportunities, about 21% compared to 14% of immigrants overall. On the other hand, a smaller share of Asian immigrants are refugees, potentially translating to relatively higher levels of poverty and lower incomes once in the U.S.

—Zillow