The National Association of Realtors (NAR) recently collaborated with the nonprofit American Student Assistance (ASA) to collect data on millenial student debt and how it affects home ownership. Of the 2,203 student loan borrowers that responded to a survey, the overwhelming majority (80 percent) do not currently own a home. Of this group, 83 percent believe their student loan debt is at least partially to blame. On average, the study concluded, these borrowers are expected to be delayed 7 years in buying their first home.
While 20 percent of respondents do own a home, their student loan debt typically surpasses their income ($41,200 versus $38,800, respectively). A quarter of these millenial homeowners indicated on the survey that their student loan debt has prevented them from selling their current homes to upgrade to new homes.
This low turnover rate, along with the 80 percent of millenials currently held back from buying a home, is making a negative impact not only on the housing market, but on the economy overall. According to NAR chief economist Lawrence Yun, “A scenario where only those with minimal or no student debt can afford to buy a home and save for retirement is not an ideal situation and is one that weakens the economy and contributes to widening inequality.”
Home ownership isn’t the only thing student loan borrowers are delaying – nearly two-thirds of respondents have not yet been able to start saving for retirement and forty-one percent are delaying marriage, citing lack of financial security as the main reason.
The good news, NAR President William E. Brown says, is that “[r]ealtors are actively working with consumers and policy leaders to address the growing burden student debt is having on homeownership. We support efforts that promote education and simplify the student borrowing process, as well as underwriting measures that make it easier for homebuyers carrying student loan debt to qualify for a mortgage.”
If you have been covering shortfalls in your bills using credit cards, loans, and home equity lines of credit that are depleting all your earnings, you may wonder:
1. What will happen when creditors are demanding payment?
2. Will I lose my home once the bank has started a foreclosure?
3. Can creditors seize my bank accounts or a portion of my paycheck?
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Florida Realtors. NAR: Student debt delays millenial home ownership by 7 years. (2017, September 18). Retrieved from http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=5&id=356753