Ex-post, Ex-ante + Which States are Equity-rich?

U.S. Home Prices - America Mortgage


Biden cancels $10,000 in student debt – timing before the mid-term elections are interesting, but no one can deny that it is a big problem that is stifling growth in many ways. The main event was Federal Reserve chairman Powell’s speech at Jackson Hole, which was a reminder that inflation is being treated more seriously than we are expecting. Risk assets have been correcting ever since – yet bonds haven’t moved with the same intent indicating smart money had priced in the Fed’s response. While 10Y treasuries do not dictate mortgage rates, they 2 are correlated, and we expect some upward pressure on rates. 


Over the next week, we will be paying attention to the Case-Schiller index as a gauge year-on-year home prices, and the big one is August ISM manufacturing index, which consensus has at 51.8 (under 50 is a contraction). If this is lower than consensus, it may portend to be something more recessionary. As we highlighted in last week’s “Ex-ante, Ex-post,” there is historically a big contraction in manufacturing output when rates rise to a certain extent.


We reiterate the underlying fundamentals of housing are very supportive, with an abundant amount of equity and well-known shortage. 

In an article written by the Fed, on 7 May 2021, “Housing Supply: A Growing Deficit”, The claim in 2018, the housing shortage was 2.5 million units, and now, more recently, in 2020, the US has a housing shortage of 3.8 million units. 

That is to say, 3.8 million units are needed to not only meet the demand from the growing number of households but also to maintain a target vacancy rate of 13%. Between 2018 and 2020, the housing stock deficit increased by approximately 52% 

Elsewhere, In Bloomberg’s article published, 5 August 2022, “Almost Half of Mortgaged Homes in US Now Considered Equity-Rich .”This would be the 9th straight quarterly rise, according to the article, fuelled by strong house valuations during the pandemic area. The article definition of Equity-Rich as owners having over 50% in home equity. Some of the highest equity-rich states are Florida, California, Washington, Utah, Idaho (surprising), and Vermont. 

Updated Target housing Stock
Equity Rich Graph


Singapore citizen purchases new development in Manhattan, New York

Location: New York CityPrice: $1,000,000
Property: CondominiumLoan Amount: $600,000
Use: InvestmentLoan-to-Value: 60%
Loan: AM Foreign National+Rate: 6.875%
Term: 30-year fixed

Singapore client attended a presentation by an international realtor on a New York condo launch. America Mortgages was attending the event and helped the client discuss the financing options available.

Philippines businessman purchases home in Florida

Location: Fort LauderdalePrice: $650,000
Property: Single Family HomeLoan Amount: $455,000
Use: InvestmentLoan-to-Value: 70%
Loan: AM Foreign National +Rate: 6.875%
Term: 30-year fixed

Referred by his local private bank, the client wanted to own a retirement home for the future (he’s only 58) but liked how rental rates have been rising in the area and also wanted more USD income.

Swedish National purchases home in Texas

Location: AustinPrice: $9,500,000
Property: Single Family HomeLoan Amount: $5,225,000
Use: InvestmentLoan-to-Value: 55%
Loan: AM HNW+ (Super Jumbo)Rate: 7.25%
Term: 5-year fixed, 30-year amortized

Swedish client saw our ad on LinkedIn and reached out to discuss the financing options for a Texas property. He was surprised at how easy it was to qualify and close for direct US lending option.

Interested in releasing equity? America Mortgages has a 97% approval rate for both U.S. Citizens & Foreign Nationals. As a company our only focus is providing market rate U.S. mortgage financing for foreign nationals and U.S. expats.

Schedule a call with us at [email protected] today! 


Buyers Guide to California Pt 2 – Demographics

Buyers Guide to California
Buyers Guide to California Pt 2 - Demographics Matter


Californication, Red Hot Chili Peppers

In last week’s “Buyer’s Guide to California Pt 1 – Education Matters,,” we discussed why Education is an important driver of where overseas borrowers choose to invest in real estate. 

In that report, we looked at the top 50 Public, and Private high schools, average ACT/SAT scores, Median Household Income, Average Home Prices, and Rental Yield.

We argued that when looking at where to make your US property investment, the quality of education in the nearby city/area is a factor in the decision since there is always a notion of “can I live there one day” and “maybe my children can go to school there”. Popular cities in the US will undoubtedly have good schools in the city or in the vicinity. 

“Popularity as a living destination” in turn drives demand, home value appreciation, and strong growth in rental income.

This week we focus on Demographics.

An under-appreciated factor in determining where to own is what city has the most culturally similar population. It’s much easier when you have neighbors that speak your language and share similar cultures and values. 

We will answer these questions (and much more)!

  • Which high schools in California has the highest Asian population?
  • Which cities have the most Korean-born residents?
  • Which cities have the highest total Asian population and the respective top schools?
  • Does the highest Asian population determine how home prices will behave?
  • Which California cities have the highest: Hong Kong, China, Taiwan, India, South Korea, and Philippines-BORN residents?

Demographics matter!

In this study, we solely focus on the Asian population in schools. Asians have been the biggest group of immigrants over the last 60++ years, spurred mainly by the Immigration Act of 1965 but also the Taiwan Relations Act of 1979, the Luce-Celler Act of 1946 as well other obvious political issues of the time.

In addition to the above reasons, many immigrants just wanted a better life for their families, they studied hard, and slowly communities grew around the top education destinations.

Here is the Asian population (>40%) for the top 50 Public and Private Schools in California.

You can also see that these cities have the highest Home Price to Median Income ratios, highlighting the center of attraction for Asians moving to the US.

Note a common rule for affordability is for a home price to be UNDER 3x your income!

Public High Schools

Public High Schools - Demographics

Private High Schools

Private High Schools - Demographics

Takeaway – You can see cities where the top schools are located have very high Home Price to Income Ratios which highlights the property value growth driven by families moving to these cities, in particular Asians.

The next study is very interesting!

Our team looks at which California cities have the highest overseas-born residents, specifically from:  China, Hong Kong, Taiwan, South Korea, Philippines, Vietnam, and India.

You guessed it, many are in the cities where the top schools are

Top Cities Taiwan & China Born Population
Top Cities Hong-Kong & Phillippines Born Population
Top Cities India & Korea Born Population
Top Cities VietnamesePopulation

We only used cities with over 20,000 population.

*Refer to full chart below

Here is same chart in Alphabetical Order

Illustrating popular cities ranked by multiple demographics

Popular Cities Ranked by Multiple Demographics

Cities in California For Asians
Average Price to Income Ratio

As you may observe in this report, the cities with the highest Asian immigrant population tend to be where the most demand is, especially when compared to household income, and it’s no surprise it’s also where the top high schools are.

That is to say, the schools and cities mentioned in last week’s report on Education being the main driver of price appreciation and rents are very similar to the cities mentioned in this report.

While this study is not meant to be a rigorous analysis by any means, it is close to my heart since I moved from Singapore to San Francisco when I was 16. My parents had the same thought process…strong Hong Kong population and good schools. I ended up finishing high school in San Francisco and attended UCLA.

Stay tuned for the final part of our Buyer’s Guide to California, where we take a quick look at the general carrying costs for a rental property, including taxes, deductions and other administrative costs. 

Finally, we will be hosting a webinar with our California Partner for a real “on-the-ground” discussion along with a panel of real estate experts for the Bay Area, Palo Alto, Los Angeles, and Orange County. We are still finalising the exact details, but this will be in September. 

Have a good weekend!  If you want a copy of the spreadsheet with the data from our research, please contact us. We are happy to share our findings.