By Charlene Crowell
As much of the nation continues to grapple with rising costs that are outpacing wage gains, new research affirms that younger, more diverse generations are caught in a financial marketplace built for yesteryear not today.
Ambition Without Access, a newly released study by the Julian Bond Institute (JBI), an initiative of the Center for Responsible Lending (CRL), is the first nationally representative look at how wealth and financial aspirations differ across race and generations particularly for Blacks and Latinos.
“Young Blacks and Hispanics want to own homes, want to start businesses, want to retire comfortably, and want to leave something for their children — at rates that either match or exceed their white peers,” states the study. “They are optimistic. They are financially motivated. And they are determined.”
The JBI 2050 Survey, conducted in cooperation with NORC at the University of Chicago, surveyed white, Black, Hispanic, and Asian Americans across Gen Z (age 18-28), Millennial (29-44), Gen X (45-60), and Boomer (61-79) age groups.
Among its findings:
*86% of Americans across every race and generation say homeownership was a financial goal when they became financially independent — yet only 23% of Black Millennials who aspired to homeownership have achieved it, compared to 51% of white Millennials.
*67% of Black Gen Z and 55% of Hispanic Gen Z aspire to own a business — a rate significantly higher than the 34% of white Gen Z who share that goal.
*77% of Black Gen Z and 70% of Hispanic Gen Z aspire to build an inheritance to pass on, even though only 18% and 20% respectively expect to receive one themselves —compared to 33% of white and 38% of Asian Gen Z who anticipate getting one.
_46% of Black Millennials are optimistic about their household’s financial future — higher than the 31% of white Millennials — despite having fewer financial resources, lower savings, and significantly less family financial support.
“The gap between financial aspiration and achievement for young and minority consumers is not a matter of motivation. It is a matter of structural access — to family financial resources, affordable credit, adequate income, and the knowledge to navigate a system not designed with these communities in mind. As the United States moves toward a majority-minority future, closing these gaps is not just a moral imperative — it is an economic one,” said Sara Weiss, executive director of JBI and a report co-author.
But homeownership, long considered the foundation for building family wealth, remains out of reach for many younger consumers.
According to the National Association of Realtors, the nation’s average price to purchase an existing home this past April was $417,700. Regionally, the lowest priced home purchases were found either in the Midwest at $324,500, or the South at $366,600. The nation’s highest prices homes at $619,600 were in the West and $510,800 in the Northeast.
Home affordability was also the focus of a recent New York Times editorial citing the vast differences in the ratio between home prices and median household income. In 1950, the median home price in the United States was $7,400 — only 2.5 times the median annual household income. “But that ratio began surging in the 2000s. Today the median home costs almost five times the median household income” states the editorial.
Conventional mortgages, the most affordable and sustainable over the 30-year length of most loans, have the advantage of fixed interest rates, but they require a 20 percent down payment to access the lowest rates available. Few young consumers can independently afford down payments ranging from $64,900 to $123,920. Smaller down payments may be available but come with higher monthly payments that include mortgage insurance.
For JBI and CRL, timely and decisive actions geared towards practical solutions are essential to overcome today’s financial roadblocks.
“The Gen Z and Millennial respondents in this survey are in the formative years when the foundation for wealth is either built or destroyed,” states the study. “The consequences of homeownership decisions, saving habits, and credit trajectories being established right now will compound themselves for decades…Thus, the time for structural reform is not after the demographic transition occurs. It is both before and during it.”
Secondly, according to the JBI study, solutions to today’s homeownership challenges must incorporate initiatives for consumers at every stage of life:
“Solutions lie in enacting initiatives to fund downpayment assistance at scale for first generation homebuyers, reforming mortgage policy to expand access, increased funding of small business support and capital access programs in communities of color, uniform adoption of state-sponsored retirement programs that allow individuals access to retirement plans when their employers do not provide them, and a commitment to modernize consumer protections so that they align with the present fintech era. Doing so will prepare us for the America that is coming; failing to do so will leave us stuck in the America that has been.”
JBI designs community-informed research that elevates the financial needs, challenges, and opportunities of our increasingly diverse nation to help financial institutions, policymakers and academia effectively design an inclusive financial market for the future.
Just as intentional policies and practices left out communities of color from wealth-building, now is the time to correct course by forging intentional inclusion.
