Student loan debt delays homebuying timeline

Over half of non-homeowning millennials (60%) say student loan debt is delaying them from purchasing a home, making them the population most affected by student debt, according to the National Association of Realtors’ 2021 impact of student loan debt report. 

By comparison, only 53% of Gen Xers, 37% of Baby Boomers and 39% of Gen Zers felt this way, according to the study.

The report was conducted by Morning Consult, a data intelligence company, on behalf of the NAR and is based on an online poll that sampled nearly 2,000 student loan debt holders.

Overall, the report found that, 51% of non-homeowning student loan holders surveyed said their debt delayed them from purchasing a home. When broken down by race, white student debt holders (52%) are more likely than Black student debt holders (43%) to say that their debt is holding them back from purchasing a home. There are also geographic discrepancies with 61% of non-homeowning Northeastern residents reporting that their debt is holding them back from homebuying, compared to 45% of Midwesterners.

“Housing affordability is worsening, leaving future home buyers with student debt at a severe disadvantage,” said NAR President Charlie Oppler in a statement.

It should be noted, however, that 46% of all student debt holders surveyed were homeowners, but Black homebuyers were more than twice as likely to have student debt than white homebuyers. Among these homeowners, 50% said that their student debt did not delay them from purchasing a home, but 21% felt that their debt delayed their purchase by at least five years.

The picture is very different when it comes to student loan debt holders who do not currently own a home. Nearly three-quarters (72%) believe that their debt will delay their purchase of a home, with 19% saying that it will delay their plans by eight or more years.

When asked why they believe their purchase of a home is delayed, 47% of non-homeowning student debt holders said it was due to their inability to save for a down payment and 45% said it was because they did not think they could qualify for a mortgage due to their debt-to-income ratio.

Looking to the future, 31% of Millennial student debt holders and 28% of Black student debt holders said that if they no longer had to pay off their debt, they would use the additional funds to purchase a home. These percentages, however, are much larger than the 13% of student debt holders surveyed who had paid off their debt in the past two years, and had bought a home.

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