Job losses during the COVID-19 pandemic hit the Asian American community particularly hard. Hate crimes also surged against the community, the fastest-growing population in the U.S.

About 60.6% of Asian Americans and Pacific Islanders are homeowners. While that’s a higher percentage than other minority groups, the numbers are lower than the national average of 65.6% in the first quarter of 2021, according to a new report, the 2021 State of Asia America, from the Asian Real Estate Association of America in partnership with RE/MAX and Freddie Mac. For comparison, the white homeownership rate is 73.8%.

“The challenges we face grew substantially throughout the pandemic, including job losses as well as an immense increase in hate crimes and subsequent housing discrimination that are forcing so many to stay in their current communities rather than move to new and unfamiliar places,” said Amy Kong, AREAA’s president.

Kong also stressed the importance of alternative credit needs “as so many in the AAPI community have been culturally adverse to credit, but have good jobs and savings. We also are working hard on overcoming language barriers, especially when it comes to paperwork involved in real estate transactions.”

The challenges in homeownership are occurring despite Asian Americans tending to have higher incomes than the national average—$93,759, which is 35% higher than the national average, the report notes.

Asian Americans tend to live in some of the priciest areas in the U.S. and thus tend to spend more on real estate when compared to national averages. The median home value for Asian Americans was $472,500, compared with the national median home list price of $380,000 in May, according to realtor.com® data.

Only five real estate markets with large Asian American and Pacific Islander populations saw homeownership rates that are higher than the national average: Riverside, Calif. (about 71% of the Asian American population were homeowners); Washington, D.C. (69%); Miami (69%); Houston (69%); and Atlanta (67%).

The report notes the South is becoming increasingly popular among the Asian American population. Georgia led the nation with a 66.9% homeownership rate for the community, the report notes.

Vacation-home sales have surged during the pandemic as remote work and low mortgage rates have made them more desirable.

In 2020, vacation-home sales climbed 16.4%, outpacing the 5.6% growth in existing-home sales, according to the National Association of REALTORS®’ 2021 Vacation Home Counties Report.

NAR identified the hottest counties for vacation homes in 2020 based on sales growth, price growth, change in days on market, and the number of seasonal homes in 2019 to account for the market’s size.

Home prices have posted double-digit annual gains and homeowners are feeling richer. Those higher prices are also driving an uptick in cash-out refinancing, in which owners are taking out some of the home equity by refinancing.

In 2020, about $185 billion of equity was taken out through cash-out refinances—the highest amount since 2007, according to Fannie Mae and Freddie Mac.

But Fannie Mae’s board of directors chair Sheila Bair warns in a new column at Yahoo! Money that homeowners need to be careful about using cash-out refinances and taking out too much of their home’s equity.

“In many cases, a cash-out refinance makes sense, allowing a family to cover a medical emergency or a longer-term investment such as college tuition or a home renovation,” Bair writes. “But cash-out refinances can also carry risks that every homeowner—and every lender—should consider, especially during times of rapid home price increases such as now.”

After all, home prices can’t rise indefinitely and there’s always a risk with cash-out refinances that home values could fall below the loan’s value.

Stricter lending standards today than preceding the Great Recession are making it more difficult for some homeowners to transact a cash-out refinance. For example, Fannie Mae now requires that cash-out refinance loans be no greater than 80% of the home’s value and at least six months of verified reserves for homeowners whose monthly debt payments are 45% or more of their monthly incomes.

Lenders and homeowners are being more cautious: 36% of 2020 cash-out refinances resulted in a mortgage balance at least 5% greater than the previous balance. From 2005 to 2008, that comprised 78% of refinances.

“The overall picture of today’s cash-out refinance market is one calling for caution, but not alarm,” Bair notes.

Bair urges any homeowners considering a cash-out refinance to recognize the importance of not missing any payments—a missed monthly payment on a cash-out refinance loan could cost them their home—and to be aware that refinancing still costs money. Closing costs could make up 2% to 5% of the loan amount. Also, Fannie Mae and Freddie Mac will not back a cash-out refinance loan with less than 20% equity.

“Homeownership can be one of the most effective ways of building wealth,” Bair writes for Yahoo! Money. “However, entering into a long-term mortgage and building equity requires care and diligence.”

The pandemic fueled a remodeling boom as more homeowners sheltered in and looked to redo their home as a new hobby. But the costs of remodeling projects have soared over the past year.

Some house projects have seen prices jump by more than 50% in 2020 compared to 2019. Also, the average spending on a remodel increased from about $9,000 in 2019 to more than $13,000 in 2020, according to a new report from Angi and HomeAdvisor.

“It was a pretty significant pivot,” said Mischa Fisher, chief economist at Angi and HomeAdvisor. “Costs went up, project sizes got larger, people chose to spend more.”

The most popular pandemic house projects were repainting, bathroom remodels, flooring, landscaping, and kitchen remodels, according to the report.

But projects are costing more to do. For example, new cabinet installation saw the largest increase in costs over the last year, jumping 56% higher than in 2019, according to the report.

Surging demand and strained supply chains are causing remodeling costs to increase. Material costs—notably lumber—have seen an uptick in prices as well.

Homeowners looking to spruce up their homes should plan ahead, Paul Emrath, vice president of survey and housing policy research at the National Association of Home Builders, told Bankrate.com. “Be prepared for possible sticker shock and the process taking a little longer than usual,” Emrath says. “Be aware of the rising trends in all the costs of the remodelers for contractors. It’s not just them being greedy and trying to drive up their profit rate, their costs are all going up as well.”

For the first time in 10 weeks, mortgage rates inched above 3%—and the era of 2% rates may be over. “As the economy progresses and inflation remains elevated, we expect that rates will continue to gradually rise in the second half of the year,” said Sam Khater, Freddie Mac’s chief economist. “For those homeowners who have not yet refinanced—and there remain many borrowers who could benefit from doing so—now is the time.”

The National Association of REALTORS® has predicted that mortgage rates will average 3.2% by the end of the year.

Freddie Mac reports the following national averages with mortgage rates for the week ending June 24:

• 30-year fixed-rate mortgages: averaged 3.02%, with an average 0.7 point, rising from last week’s 2.93% average. A year ago, 30-year rates averaged 3.13%.
• 15-year fixed-rate mortgages: averaged 2.34%, with an average 0.7 point, increasing from last week’s 2.24% average. A year ago, 15-year rates averaged 2.59%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.53%, with an average 0.3 point, up slightly from last week’s 2.52% average. Last year at this time, 5-year ARMs averaged 3.08%.

Freddie Mac reports average commitment rates along with points to better reflect the total upfront cost of obtaining a mortgage.

To win a bidding war, more buyers are waiving appraisal and inspection contingencies, according to the latest REALTORS® Confidence Index survey. Home buyers most commonly are waiving the appraisal contingency (28%) and the inspection contingency (25%), shows the survey of more than 3,300 REALTORS®.

The buyers waiving contract contingencies are those who are either paying cash or using conventional financing.

Buyers using FHA or VA loans can’t waive the appraisal or inspection contingencies due to financing guidelines, Gay Cororaton, research economist for the National Association of REALTORS®, writes on NAR’s Economists’ Outlook blog. Therefore, those buyers may be at a competitive disadvantage compared to other buyers who don’t have to follow certain financing rules. For example, FHA inspection standards require that components of a home are in good working condition, such as the heating unit, water heater, and smoke detectors. FHA buyers are unable to waive the inspection to compete and still get their loan.

“In a housing market where sales are moving swiftly, the time to undertake the inspection and appraisal is creating a hurdle for buyers obtaining FHA-insured loans, who are typically first-time buyers, and buyers obtaining VA-guaranteed loans,” Cororaton writes.

Buyers also must compete against those who are bringing more money to close. The share of mortgages with at least a 20% down payment increased to 52% in May, up from about 40% in 2011, the NAR survey shows. Nearly one in three first-time buyers made a down payment of at least 20%, up from about 25% in 2011.

Home buyers with conventional financing are edging out those with FHA and VA loans, which offer low down payment financing. Conventional conforming mortgages, which conform to guidelines set by Fannie Mae and Freddie Mac, accounted for 74% of mortgages issued in May, an increase from 65% in 2018. On the other hand, the share of FHA-insured mortgages comprised 14% of mortgages in May. In past years, that percentage was around 20%. Also, the share of VA-guaranteed loans fell to 7% in May, down from its 10% average in recent years.

Real estate pros report that VA loans, for example, have a reputation for receiving low appraisals that can make it difficult for buyers to compete in an environment where home prices are escalating quickly. VA appraisals often can average five to 15 days to complete—a lengthier timeline than many other loans. “It is extremely difficult for FHA/VA buyers to get accepted in a multiple-offer situation,” writes one real estate pro in the REALTOR® survey. “They are on the bottom of the hierarchy.”