{"id":4903,"date":"2026-03-20T05:45:24","date_gmt":"2026-03-20T05:45:24","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2026\/03\/20\/homeownership-on-hold-long-term-costs-for-young-adults-of-color-bankrate\/"},"modified":"2026-03-20T05:45:24","modified_gmt":"2026-03-20T05:45:24","slug":"homeownership-on-hold-long-term-costs-for-young-adults-of-color-bankrate","status":"publish","type":"post","link":"https:\/\/ft365.org\/index.php\/2026\/03\/20\/homeownership-on-hold-long-term-costs-for-young-adults-of-color-bankrate\/","title":{"rendered":"Homeownership on hold: Long-term costs for young adults of color | Bankrate"},"content":{"rendered":"
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Mirian Fuentes has big plans for her future.\u00a0<\/p>\n

The 30-year-old Mexican-American has been dating her partner, Andres, since 2024, and knew early on that he was \u201cthe one.\u201d The couple dreams of getting married, starting a family and buying a home \u2014 a key step toward building generational wealth as the children of immigrant parents.\u00a0<\/p>\n

But those plans are on hold because of Fuentes\u2019 $169,000 in student loan debt and $14,000 in credit card balances.<\/p>\n

Fuentes isn\u2019t alone. She is among the Gen Z and millennial adults delaying or abandoning major life milestones, like homeownership. It\u2019s a reality felt even more keenly among young adults of color.<\/p>\n

Among Americans with credit card debt, for example, Hispanic adults are more than twice as likely as white and Black adults to say they have delayed buying a home because of that debt, according to Bankrate\u2019s Credit Card Debt Report.<\/p>\n

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It makes me a little sad, because I think 20-year-old me would have thought that 30-year-old me would have already accomplished these things<\/p>\n

\u2014 Mirian Fuentes<\/cite> <\/p><\/blockquote>\n

Social media only adds to the pressure. \u201cYou see your friends and peers and some of them have already accomplished these milestones,\u201d she says. \u201cYou can\u2019t help but compare yourself and say, \u2018I should probably be in that same situation.\u2019\u201d<\/p>\n

The consequences of delaying major life milestones go beyond failing to check off life goals, especially for young adults of color like Fuentes. When paying off debt takes priority, it restricts \u201ctheir ability to accumulate wealth,\u201d says Breno Braga, an economist at the Urban Institute, a nonprofit research organization based in Washington, D.C. \u201cThis pattern is likely to perpetuate and even further exacerbate racial wealth inequality as these cohorts enter their prime working and wealth-building years.\u201d<\/p>\n

How the wealth gap disproportionately affects young adults of color<\/h2>\n

A home is the largest asset most people will ever own, and it\u2019s also a major driver of generational wealth. For young people of color, it\u2019s a milestone they increasingly can\u2019t afford, pushing them further behind their white peers.\u00a0<\/p>\n

According to Redfin, only 32% of Black millennials and 14% of Black Gen Zers own homes, about half the rate of their white peers. This dynamic is shaping who can build equity and who gets left behind.\u00a0<\/p>\n

Historically, Black and Hispanic Americans have had the lowest homeownership rates of all ethnic groups. Heavy debt loads aren\u2019t making the possibility of buying a home any easier. According to the Urban Institute, 45% more young adults of color (18-24) have debt in collections than their white counterparts, suggesting \u201cthe group is managing debt instead of building assets,\u201d says Braga.<\/p>\n

Add to that the stark racial wealth gap. The most recent federal data shows that in 2022, the median wealth of the typical white family ($285,000) was six times that of the typical Black family ($44,900) and five times that of the typical Hispanic family ($61,600). Those disparities begin early in adulthood, limiting the ability of young people of color to save for a down payment for a home.<\/p>\n

For Fuentes, growing up with parents who held minimum-wage jobs, getting extra help to buy a home simply wasn\u2019t an option.<\/p>\n

\u201cWhen adults of color accumulate less wealth, they are less able to purchase homes in high-opportunity neighborhoods, invest in their children\u2019s education or provide financial support during key life transitions,\u201d says Braga. <\/p>\n

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\u201cThis lack of transferable resources limits the next generation\u2019s ability to build assets and take economic risks, reinforcing a cycle in which wealth advantages are passed down for some families but not others. Over time, these dynamics are likely to further entrench racial wealth inequality across generations.\u201d\u00a0 <\/p>\n

\u2014 Breno Braga, Economist, Urban Institute<\/cite> <\/p>\n<\/blockquote><\/div>\n

The cost of postponing homeownership (2020-2025)<\/h3>\n

The median age of first-time homebuyers is now 40, pushing a once-early milestone further into midlife. Between 2020 and 2025, for example, those who postponed buying a home missed out on substantial price and equity gains.<\/p>\n

\n\n\n\n\n\n
Metric<\/strong><\/td>\n2020<\/strong><\/td>\n2025<\/strong><\/td>\n% Increase<\/strong><\/td>\nWhat Non-Buyers Missed<\/strong><\/td>\n<\/tr>\n
Typical Home Price<\/td>\n$253,922<\/td>\n$369,233<\/td>\n+45.4%<\/td>\n$115,311 in price appreciation<\/td>\n<\/tr>\n
Average Home Equity<\/td>\n$46,431<\/td>\n$112,430<\/td>\n+142.1%<\/td>\n$65,999 in equity growth <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Source:<\/strong> Bankrate: States where home equity has risen the most\/least since 2020<\/em><\/p>\n

Back in 2019, then 24-year-old Savannah Liberato, the daughter of Puerto Rican and Dominican parents, dreamed of becoming a single homeowner. \u201cI knew people with salaries lower than mine who had purchased a home,\u201d she says. But soon, Liberato realized her student loan debt, along with the car loan she co-signed for her mother, would make buying a home impossible.<\/p>\n

\u201cIf I had to sum it up into one emotion, I would say initially I was defeated,\u201d she says.\u00a0\u00a0\u00a0<\/p>\n

Today, now 31 years old, Liberato\u2019s circumstances have changed. In particular, she has a fianc\u00e9, Adam. As of early 2025, the couple had eliminated $69,000 in combined debt: $29,000 in student loans and car loans for her and $40,000 in student loans for him. (She dipped into her savings and he had his loans forgiven.) Now, homeownership feels possible again.\u00a0<\/p>\n

\u201cThe ideal plan would be we save up for the wedding,\u201d she says. \u201cWe get married in 2027. We live together for a year, stockpiling one person\u2019s paycheck. Then maybe put a 20%, 30% down payment on a home in the second year of marriage.\u201d<\/p>\n

Even with a strategy in place and homeownership on the horizon, the delay still lingers in her mind.<\/p>\n

\u201cCurrently, my partner and I are blessed to have good incomes where we should be able to comfortably afford a home,\u201d says Liberato, who works for Bankrate\u2019s parent company, Red Ventures. \u201cI\u2019m still a little sad I couldn\u2019t do it on my own, but I know that together we will have a better quality of life, as opposed to me being house poor on my own.\u201d<\/p>\n

Buying a home in 2020 vs. 2025<\/h3>\n

2020 was a wild year for the housing market: As the pandemic hit, 30-year fixed mortgage rates dropped, eventually hitting a near-record low of 2.95%, according to Bankrate\u2019s tracking. By 2025, rates had more than doubled, and home prices weren\u2019t far behind.\u00a0\u00a0<\/p>\n

Even so, while there\u2019s a real cost to delaying homeownership, waiting isn\u2019t automatically a mistake. Taking time can give buyers a chance to improve their credit, pay down debt and save for a larger down payment \u2014 all of which can make a future purchase more manageable. If you\u2019re worried about rates increasing, remember that buying at a higher mortgage rate doesn\u2019t mean you\u2019re locked into it forever. If rates drop in the future, you have the option of refinancing your mortgage to lower your rate and monthly payments.\u00a0<\/p>\n

\n\n\n\n\n\n\n\n\n\n
Metric<\/strong><\/td>\n2020 Purchase<\/strong><\/td>\n2025 Purchase<\/strong><\/td>\nDifference<\/strong><\/td>\n<\/tr>\n
Home Price<\/td>\n$253,922<\/td>\n$369,233<\/td>\n+$115,311<\/td>\n<\/tr>\n
Down Payment (20%)<\/td>\n$50,784<\/td>\n$73,847<\/td>\n+$23,063<\/td>\n<\/tr>\n
Loan Amount<\/td>\n$203,138<\/td>\n$295,386<\/td>\n+$92,248<\/td>\n<\/tr>\n
Lowest Mortgage Rate<\/td>\n2.95%<\/td>\n6.67%<\/td>\n+3.72 pts<\/td>\n<\/tr>\n
Monthly Payment (P&I)<\/td>\n$851<\/td>\n$1,959<\/td>\n+$1,108\/month<\/td>\n<\/tr>\n
Total Interest Paid (lifetime of loan)<\/td>\n$103,211<\/td>\n$409,950<\/td>\n+$306,739<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Source:<\/strong> Bankrate\u2019s mortgage calculator<\/em><\/p>\n

Charting a path to homeownership<\/h2>\n

You don\u2019t have to give up on your dreams of homeownership forever. Certainly, there are circumstances and unexpected expenses that are beyond your control, so take control of what you can. Here are five steps you can take to work toward achieving homeownership:<\/p>\n