Student Debt Stymies Home Buying, NAR

Washington, DC, June 14, 2016—Seventy-one percent 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.

This is according to a new joint survey on student loan debt and housing released by the National Association of Realtors and SALT, a consumer literacy program provided by nonprofit American Student Assistance. The results also revealed that student debt postponed four in ten borrowers from moving out of a family member's household after graduating college.

Nearly three-quarters of non-homeowners polled in the survey believe their student loan debt is delaying them from buying a home. Broken down by each generation and debt amount, the percent share is the highest among older millennials approximately aged 26 to 35 (79% and those with $70,000 to $100,000 in total debt. Regardless of the outright amount of student debt, more than half of non-homeowners in each generation report that it's postponing their ability to buy.

The survey, which only polled student debt holders current in their repayment, yielded responses from borrowers with varying amounts of debt from mostly a four-year public or private college. Forty-three percent of those polled had between $10,001 and $40,000 in student debt, while 38% 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 homeownership 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.