Student Loan Debt Delays Home Buying for American Millennials
The majority of American Millennials do not own a home, and feel forced to delay buying one, due to their hefty student loans.
According to a recent study jointly conducted by the National Association of Realtors and American Student Assistance, about 80% of Millennials in the United States do not own a home, with an overwhelming majority of them blaming it on their student debt loads.
Of those Millennials who do not currently own a home, 83% say their decision to postpone buying a property is largely based on their student debt load. Further, 84% of the Millennials who don’t own homes say they expect that their home ownership will be delayed by at least three years. Meanwhile, the median expected delay that the survey respondents reported is about seven years.
The sad reality is that most American youths are burdened by student loans. Some 79% of the respondents say they borrowed money to finance a four-year college education. Meanwhile, 51% of the respondents are still paying off a student debt of $40,000. The study found that the average American Millennial carries a student debt burden of about $41,200 while earning an annual income of only about $38,800.
Millennials who do own a home identify their student debt burden as the reason behind not selling or upgrading their current homes. About 25% of Millennial homeowners say their student loans are preventing them from selling their current homes and buying new ones. In some cases, their student loans have negatively affected their credit histories, which could ultimately hurt their chances when applying for future mortgages.
The study also found that about 41% of American Millennials have postponed their plans to get married, and more than half have postponed their plans of continuing their education and starting a family. Roughly 61% of respondents said that, at times, they have been unable to save for retirement.
As of now, the total student debt load being carried by American households has crossed $1.4 trillion, and is growing each passing day.
“Student Debt Delaying Millennial Homeownership by 7 Years,” National Association of Realtors, September 18, 2017.