Los Angeles — Asians, many of them living in foreclosure-ravaged California, suffered the sharpest drop in homeownership last year, eclipsing declines felt by whites, blacks and Hispanics, according to new Census data.
The decline was surprising, because Asians tend to earn more than other minority groups and have less debt.
But one out of three Asian homeowners lives in California, which has experienced skyrocketing foreclosure rates and plummeting home values since the housing bubble burst. And that appears to have disproportionately exposed them to the effects from the housing collapse, observers suggested.
The U.S. homeownership rate fell to 66.6 percent last year, the lowest in six years, after hitting a peak of 67.3 percent in 2006, according to figures from the American Community Survey, which was released by the U.S. Census Bureau.
Homeownership for Asians fell 1.24 percentage points last year to 59.4 percent.
The decline was 0.88 percentage points for blacks to 45.6 percent. Hispanics experienced a similar decline, down 0.80 to 49.1 percent. Whites suffered the smallest decline, down 0.40 to 73.4 percent.
But because Asians only represent 3.3 percent of all U.S. homeowners, the decline in the number of black and white households was greater. The number of Hispanic homeowners actually rose, reflecting trends in immigration and higher birth rates.
Nevertheless, as a population group, Asian homeowners fared far worse than others.
That revelation surprised some observers such as Edward Wolff, an economist at New York University.
“Based on their income and relatively low debt, one would expect that they would have a smaller decline in homeownership,” Wolff said.
The median annual household income for Asians was just more than $70,000 last year, higher than for any other racial group.
“It’s possible that it’s a regional effect,” Wolff suggested. “There’s a high concentration of Asian-Americans in California, and California got particularly hard hit by property (price) declines and high foreclosure rates.”
While foreclosures have been declining monthly in California this year, the state continues to have the most foreclosures in the country and one of the highest rates of foreclosure-related filings, according to RealtyTrac Inc.
The drop in homeownership is a reversal after the housing boom years, when minorities in the U.S. took advantage of easy access to financing and became homeowners.
Minorities haven’t lost all the gains reaped during the housing boom years, but data from 2009 could begin to show otherwise, said demographer Mark Mather with the Population Reference Bureau in Washington, D.C.
Jennifer Nguyen and her husband, Mike Truong, are among this year’s once-again renters, who will be counted in the 2009 Census survey that will be released next year.
The couple owned a townhome and sold it in 2004, making a $200,000 profit that they put toward a $555,000, three-bedroom, two-bath house in Anaheim two years later.
But financial problems mounted after Troung, a truck driver, saw business slow along with the economy. The couple fought to hang on to their home, but couldn’t refinance because the property’s value had dropped sharply. Attempts to get their mortgage loan modified also failed.
In June, the bank took possession and sold it at auction.
“At that moment my body was numb,” according to an e-mail attributed to Nguyen, 30. “Our first chapter of our life has been shredded and we are now ready for a new fresh start.”