4 ways to help AAPI families achieve first-time homeownership

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The Asian American and Pacific Islander community in the U.S. reached a significant milestone in 2023 as homeownership among its members soared to an all-time high of 62.8%, according to the National Association of Realtors

But that number should be higher. Much higher. 

Sam Chang Thrivent wealth advisor

Sam Chang, Thrivent wealth advisor

Many people within the AAPI community face unique financial challenges on their path to homeownership, particularly multigenerational families living together and small business owners. More than a quarter (27%) of Asian Americans live in a multigenerational household, higher than the share among Americans overall (19%), according to a 2021 report from the Pew Research Center

This family structure can present unique obstacles in the homebuying process. 

READ MORE: How wealth management can better serve AAPI clients and advisors

Additionally, Asian-owned businesses made up 10% of all businesses in the United States in 2020, according to the U.S. Census Bureau. For small business owners, buying a home can be challenging. Lenders may perceive them as having higher levels of risk, making it harder to prove stability of income. And oftentimes, their resources are stretched thin, adding to the financial pressures they experience.

I know these realities well. I immigrated to America from Taiwan when I was 5 years old with my parents and two sisters. As restaurant owners, my family gained valuable life and money lessons firsthand. Throughout my life as an Asian American, I’ve been perceived as someone who’s frugal with my money. I also felt the cultural expectation to live in a multigenerational household.

Today, working as a wealth advisor at a Fortune 500 financial services organization, I’ve been able to take these experiences and pave a new way for my family while holding onto meaningful aspects of my culture. I’m also able to provide tailored strategies that help empower people of all backgrounds, including those of my thriving AAPI community. 

As we celebrate Asian/Pacific American Heritage Month, and with the spring real estate market in full swing, here are four tips for financial advisors that I’ve found useful in helping people — whether they’re small business owners or living in multigenerational households — stay aligned with their financial goals as they navigate the homebuying process.

READ MORE: Fastest-growing U.S. racial-ethnic group has been underserved by wealth management: Merrill

Keep homebuyers away from bidding wars

In a hot housing market prices outpace the appraised value of homes. As advisors, we can help those who are new to the United States and/or first-time homebuyers understand how this can impact their financial goals. 

Encourage clients to stay within their budget versus getting caught up in bidding wars, which can result in overpaying for a home and potentially dipping further into savings.

Emphasize the importance of home inspections

While everyone wants to make the most for their money, no one wants a bargain at the cost of finding themselves in a constant cycle of pricey home repairs. 

Make sure your clients work with their real estate agent to understand the importance of home inspections. Potential hazards and unforeseen repair costs can significantly impact a client’s budget, so reinforcing this will help people save money over time.

READ MORE: Ask an advisor: Is buying a home really necessary?

Demonstrate the link between homeownership and retirement planning

Older generations from some cultures rely on their children once they’re retired. For the generation sandwiched between caring for growing children and aging parents who are considering purchasing a home, this can be especially tough. 

Remind clients to have open and honest conversations with their loved ones. They’ll need to set a clear budget for things like home repairs, mortgage payments and daily upkeep, while simultaneously supporting aging family members and saving for their own retirement.

Be an advocate for diverse communities

People have different cultural preferences that might influence their housing choices. For example, some Chinese Americans desire layouts that accommodate feng shui principles, so a house where the bottom of the staircase leads directly out the front door might be viewed negatively because it symbolizes wealth flowing out of the home. 

As financial advisors, we can encourage clients to collaborate with realtors and mortgage brokers to be aware of different cultural nuances. This can help them feel more confident throughout the homebuying process. 

By integrating these principles into your financial planning approach, you can help empower clients to make well-informed decisions during the homebuying process aligned with their unique financial goals and cultural values. This not only empowers them to achieve financial clarity but also helps strengthen the fabric of diverse communities, ensuring homeownership remains a cornerstone of stability and prosperity for generations to come.

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