Is your co-op or condominium having trouble attracting younger buyers? If so, you’re not alone. And the culprit might be something that never occurred to you: young Americans’ crushing load of student debt.
“The U.S. currently has a student debt load of $1.4 trillion, which accounts for 10 percent of all outstanding debt and 35 percent of non-housing debt,” says a new joint study by the National Association of Realtors and the nonprofit American Student Assistance. “The magnitude of the debt continues to grow in size and share of the overall debt in the economy. While this amount of debt has risen, the homeownership rate has fallen, and fallen more steeply among younger generations.”
Millennials – people born after 1980 – who don’t already own homes are delaying purchasing one for a median of seven years, according to the study. Overall, 83 percent of non-home owners said they believe that student loan debt has delayed them from buying a home – and that figure is higher among older millennials (those born between 1980 and 1989) and people who have more than $70,000 in student loan debt. The report was based on the results of a survey of 2,203 student loan borrowers.
Most commonly, student debt is affecting people’s ability to save, the New York Post reports. Some 85 percent of respondents said they have not been able to save for a down payment because of their student loans. Additionally, nearly three-quarters of people said they’re putting off buying a home because their student debt makes them feel too financially insecure. More than half (52 percent) of respondents also said that they can’t qualify for a mortgage because of their debt-to-income ratio.
And it’s not just the decision to buy a first home millennials are putting off. Student debt is also affecting their ability to take a vacation, buy a car, or continue their education.
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