Student Debt Delays Home Ownership
The most common student debt amount owed by borrowers is $20,000 to $30,000.
“Paying a few hundred dollars every month on a student loan equates to thousands of dollars over several years that could otherwise go towards saving for a home purchase.” – Lawrence Yun, NAR chief economist
A new study by the National Association of Realtors® shows that 71% of non-homeowners repaying their student loans on time believe their debt is stymieing their ability to purchase a home, and slightly over half of all borrowers say they expect to be delayed from buying by more than five years.
The study’s results also revealed that student debt postponed four in 10 borrowers from moving out of a family member’s household after graduating college.
Forty-three percent of those polled for the survey had between $10,001 and $40,000 in student debt, while 38 percent had $50,000 or more. The most common debt amount was $20,000 to $30,000.
Lawrence Yun, NAR chief economist, says the survey findings bring to light the magnitude student debt is having on the housing market and the budget of even those financially able to make on-time payments. While obtaining a college degree increases the likelihood of stable employment and earning enough to buy a home, many graduating with this debt are putting home ownership on the backburner in part because of the multiple years it takes to pay off their student loans at an interest rate that’s oftentimes nearly double current mortgage rates.
“Realtors® work closely with our clients and consumers everyday; we understand the severity of the problem. This is not an abstract issue for us. This is why Realtors® are leading the real estate industry in the discussion of student loan debt and its impact on housing by generating the most encompassing research on this topic,” said NAR Vice President Sherri Meadows, a Realtor® from Ocala, Florida.