Student Loan Debt Holding Back Majority of Millennials from Homeownership

Sixty percent of non-homeowning millennials say student loan debt is delaying their ability to shop for a home, far and away the foremost affected population, consistent with a replacement poll released on Sept. 14 by the National Association of Realtors.

The findings also show that Americans burdened with high student debt see the impact on their daily lives. They often must choose from investing in their retirement, purchasing a home, getting married, starting a family, or general savings.

NAR partnered with Morning Consult on the report The Impact of Student Loan Debt.

“Housing affordability is worsening, leaving future home buyers with student debt at a severe disadvantage,” said NAR President Charlie Oppler, a Realtor from Franklin Lakes, NJ, and therefore the CEO of Prominent Properties Sotheby’s International. “Younger Americans shouldn’t need to choose from education and homeownership, and NAR continues to pursue policies that make sure the American Dream remains available and accessible for those still paying off their college education.”

The new research also uncovers that only 23% of student loan debtholders understood the prices of attending college before removing loans. Moreover, 35% of these student loan debt holders didn't fully understand their potential for earnings following graduation.

According to the report, 51% of all student loan holders say their debt delayed them from purchasing a home. Thirty-six percent of student loan debtholders say student loan debt delayed their decision to maneuver out of a family member’s home, a percentage that rises to 52% among Black debtholders. Ultimately, the report shows that 31% of millennials and 28% of Black student debtholders would use their additional funds to get range in the longer term with no student loan debt.

“Aside from just purchasing a home, this report finds that quite half those with student loan debt have delayed some sort of major life choice,” Oppler continued. “Student loan debt isn’t just seeping into housing affordability. It’s also plaguing other aspects of people’s lives.”

To address the growing debt burden, NAR supports a multipronged approach. Financial education should be expanded to assist students as they face decisions about financing their education, while aid programs should be simplified. For those that hold debt, opportunities to consolidate and refinance debt at lower rates will help debtholders lower monthly debt payments, make large purchases, and make wise life choices. Finally, NAR favors expanding tax preferences for employers who assist employees with their student debt also as tax forgiveness for debtholders who have their debt forgiven or paid off by their employer.

NAR has been collecting and examining research during the past eight years to measure the impact of student loan debt on future homebuyers. the info pattern now affirms that student loan debt is one among the foremost significant barriers standing between a possible buyer and therefore the ability to get a home.

Today’s new findings repose on last year’s annual survey of successful homebuyers, “Profile of Home Buyers and Sellers,” which showed that student loan debt was the foremost significant factor delaying their ability to save lots of among buyers who had difficulty saving for a deposit . This research found Black homebuyers were quite twice as likely to possess student debt than White homebuyers, with a median amount of $10,000 quite White buyers.

“The Impact of Student Loan Debt” poll was modeled off NAR reports from 2016 and 2017, with a narrower scope. The research themes are comparable, but the most recent report considers the present federal stimulus package and the way the COVID-19 pandemic has affected debt in our country.

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