April 13, 2017 (STLRealEstate.News) It was only a matter of time before the millennial generation’s billions of dollars of student loan debt began to affect their purchasing ability and interest in American real estate today. Student debt is absolutely out of control, with the average college graduate entering the world with tens of thousands of dollars of debt and not a lot of job prospects available. Although home sales continued to rise in 2016, a recent study from the National Association of Realtors found that prospective home-buyers are continuing the trend of delaying their purchase of a home due to student debt, affordability issues, and confusion on down payment options.
Within the study, the main reason non-owners continued to be able to not afford a home of their own was student debt related. Of the 39 percent of non-owners in the survey who said they have student debt, 59 percent indicated they are not very, or not all, able to take on a mortgage at this time. Generations before millennials did not have the same time of student debt to shoulder, and therefore did not struggle to meet smaller mortgages when starting a life in their 20s.
The study also found that half of these borrowers stated they expect to be delayed by five or more years, despite about 80 percent of those surveyed expressing interest in owning a home and pursuing the American dream. They stated the ability to own a home is unfortunately just plain not obtainable at this time.
At the same time, home prices and rent prices have been driven up 41 percent nationally in the last five years alone. Coupling that with the increasing student debt, many state they can’t even dream of owning a home for at least 5-years down the road. Hopefully something gives in the future regarding this housing conundrum for millennials.