Housing finance literature concerned with differential experiences across races and ethnicities focuses generally on the outcomes of African Americans or Hispanics. Few studies examine the experiences of Asian Americans, even though this group of borrowers plays a substantial role in mortgage markets. For example, Asians applied for and obtained a larger share of purchase money mortgages than African American or Hispanic borrowers in 2011, measured in both counts and dollars (based on conventional, 1-4 family and manufactured home dwellings from Home Mortgage Disclosure Act (“HMDA”) data). Asian Americans, moreover, are one of the fastest-growing racial groups in the country, have relatively high homeownership rates, and recent estimates suggest that Asians have exceeded Hispanics as the largest new immigrant group to the US (for example, see “The Rise of Asian Americans” from the Pew Research Center).

A likely reason why Asian American borrowers have received less research and regulatory attention is the belief that members of this group are, on average, more economically successful than other minority groups in the US.  Earlier studies of discrimination in lending, for example, rarely found any instance where Asian Americans would be denied mortgage loans more often than non-Hispanic whites.  As credit distributions for Asian Americans mirror those of non-Hispanic whites, not much evidence of pricing differentials appeared. 

A reliance on mean outcomes, however, does not reflect the heterogeneity of Asian American experiences. Because of differences across key factors such as time since immigration and country of origin, many believe that the Asian American economic distribution is bi-modal, with clusters at the high- and low-ends. The positive experiences of a relatively small number of elite Asians bias average statistics upwards, whereas the bottom of the distribution suffers disadvantages comparable to the similarly situated members of other minority groups. Some advocates have claimed that the focus on mean outcomes, as well as social constructions such as the model minority myth, have led to Asians having an overstated perception of success and a resultant lack of social service targeting.

In this paper, we examine the experiences of Asians in US mortgage markets. We test for differences in the price level (as measured by mortgage annual percentage rates) and approval rates compared with other racial and ethnic groups, while controlling for key economic factors such as credit worthiness or type of loan product.  As well, we analyze differences based on the racial composition of borrowers’ neighborhoods. We pay particular attention to the question of whether outcomes differ at different points in the distribution of various economic measures, using matching and quantile regression methods. The primary data source for this paper is a unique sample of private lender mortgage records, and we supplement these data with data available from HMDA and Census.