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AAPI Homeownership Gaps: What Credit Unions Need to Know

By Bernard Nossuli posted 07-10-2025 11:37

  

The Asian American and Pacific Islander (AAPI) community is a more diverse, complex ecosystem of households than its aggregate trend of upward mobility shows. iEmergent conducted an in-depth analysis of homeownership trends among the AAPI community, the fastest growing racial group in the United States, showing the disparities between its two population segments and how credit unions can move beyond one-size-fits-all strategies. While key housing metrics show Asian Americans track closely with national averages, Pacific Islanders lag far behind. This knowledge reveals the need for credit unions to consider how progress for one member segment does not mean progress for all as they craft policy, products, and outreach efforts.

Asian American and Pacific Islander Homeownership Gaps

Lending to members of the AAPI community has been slowly but steadily growing following this cohort’s rapid population growth. The number of Asian Americans more than doubled from 11.9 million in 2000 to 24.8 million in 2023, including growth in both U.S.-born and immigrant populations, and now accounts for 6.4% of the total U.S. population. Pacific Islanders account for .03%, according to 2024 U.S. Census Bureau data.

Despite these demographic gains, homeownership remains a challenge for many within these communities. The Census Bureau does not report a combined homeownership rate for the entire AAPI population. Instead, Asian Americans and Pacific Islanders are reported separately, and both groups trail behind the national homeownership average of 64.9% and the 72.7% rate for non-Hispanic white households.

  • Asian American homeownership rate: 61.6%
  • Pacific Islander homeownership rate: 43.3%

Disparities Within the AAPI Community

While both Asian Americans and Pacific Islanders face homeownership challenges compared to the broader U.S. population, a closer look at mortgage data reveals significant differences within the AAPI community itself.

For example, the average loan size for Asian American borrowers exceeds that of Pacific Islander borrowers by more than $150,000, indicating higher home prices and property values among Asians American homebuyers. Asian Americans also account for a growing percentage of loan applications, increasing from 6.84% in 2020 to 7.25% in 2024. But for Pacific Islanders, the percentage of applications has remained stagnant.
Percent of Applications By Race/Ethnicity, 2020-2024

Pacific Islander applicants also experience higher denial and fallout rates compared to their Asian American counterparts. As of 2024, the denial rate for Pacific Islanders stood at 27.82%, nearly 12 percentage points higher than the 16.11% denial rate for Asian Americans. 

Fallout rates, the percentage of mortgage applications that do not result in a closed loan, have also worsened for both groups in recent years, but the increase has been significantly steeper for Pacific Islanders. Among Asian American applicants, the fallout rate rose from 36.7% in 2020 to 41.2% in 2024, an increase of 4.5 percentage points. For Pacific Islander applicants, the fallout rate climbed from 41.5% to 51.8% over the same period—a 10.3 percentage point increase—further underscoring the persistent challenges this group faces in the mortgage process.
Asian Borrower Purchase Application Fallouts, 2020-2024

Pacific Islander Borrower Purchase Application Fallouts, 2020-2024

Equitable Actions Credit Unions Can Take

The housing and mortgage challenges faced by the AAPI community, a dynamic and growing population of future homebuyers, highlights an opportunity for credit unions to expand reach, lend to the underserved, and build a sustainable market presence. 

1. Design New Lending Programs

AAPI members may run into challenges with traditional debt-to-income ratio and credit history requirements. Designing lending programs and products that support AAPI members can help close the homeownership gap. 

2. Promoting Credit and Homebuyer Education

When communicating with future AAPI homebuyers, credit unions should include in-language resources and culturally relevant outreach. 

Strengthening Community Partnerships

Partner with AAPI community organizations, cultural centers, and faith-based groups. Also hire and train loan officers who have strong relationships in AAPI communities.

4. Strategize with Data and Analysis

Access to detailed, local-level data is critical to addressing the needs of AAPI members. With iEmergent’s market intelligence tools, credit unions can uncover growth opportunities in underserved AAPI markets, identify new market segments, and develop well-informed lending strategies.

Nuances among the AAPI borrowing experience reveal the need for credit unions to develop innovative, inclusive lending strategies for this growing population of future homebuyers. With proactive engagement informed by data-driven decision-making, credit unions can help expand mortgage access and close the homeownership gap.

Contact iEmergent today to learn more about AAPI homeownership trends and how iEmergent’s data can help identify lending opportunities.
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