October 30th, 2017
Breaking. High levels of student debts are one of the major barriers to homeownership according to a new report from the National Association of Realtors. It says that an overwhelming majority of millennials, who should be prime homebuyers, are unable to become first-time buyers due to their student debt creating an average 7-year delay. The study, in association with the nonprofit American Student Assitance, found that just 20% of millennial respondents are homeowners. Student debt amont respondents is typically more than a year's income at $41,200 (income $38,800) and 83% of those who do not own a home say their student debt has affected their ability to buy. While 7 years is the median delay, 84% expect to delay honmebuying by at least 3 years.
"Sales to first-time buyers have been under whelming for several years now, and this survey indicates student debt is a big part of the blame. Even a large majority of older millennials and those with higher incomes say they're being forced to delay homeownership because they can't save for a down payment and don't feel financially secure enough to buy." said Lawrence Yun, NAR cheif economist. "Millennial homeowners who can't afford to trade up because of their student debt end up staying put, which slows the turnover in the housing market and exacerbates the low supply levels and affordability pressures for those trying to buy their first home." added Yun.
Source: Mortgage Professional American