Student Loan Debt Isn’t Stopping Millennials From Buying Homes
Although student loan debt is a prevalent concern for many millennials, it’s not preventing them from dominating the home buying market. A 2016 National Association of REALTORS® Home Buyer and Seller Generational Trends study* found that 35 percent of all home buyers were millennials. More than the combined amount of younger and older boomers (31 percent). Generation X were 26 percent of buyers, and the Silent Generation made up 9 percent.
The survey also found that despite millennials’ concern over student loan debt, they are actually not the generation that is struggling with the largest balances. Lawrence Yun, NAR chief economist remarks on the findings, “Whether it’s from financing their own education or borrowing for their children, it’s somewhat surprising to see a higher median amount of student debt among Gen X ($28,000) and younger boomer buyers ($29,100) compared to millennials ($25,000).”
Even though millennials continue to see student debt as their primary obstacle when becoming a homeowner, they have led the housing market for the past three years. Among the buyers who said saving for a down payment was the most difficult task, millennials were also most likely to cite student debt (53 percent) as reason for the delayed saving. However, on average millennials only postponed buying a home for three years in order to pay down debt, while older baby boomers needed six years.
*Survey generational breakdowns: millennials (ages 35 and under); Generation X (ages 36-50); younger boomers (ages 51-60); older boomers (ages 61-69); and the Silent Generation (ages 70-90).