NAR: Student Loan Debt Major Barrier To Homeownership

After eight years of examining its impact, the National Association of Realtors (NAR) says that student loan debt is one of the most significant barriers for potential homebuyers.

A poll by NAR found that more than half of non-homeowners say their student loan debt has delayed their ability to buy a home. Of 1,995 respondents, 51% said their student loan debt delayed them from buying a home, with 47% saying it prevents them from saving for a down payment. For millennials, that number jumps to 60%.

Forty-six percent of debt holders say they would use their additional funds to buy a home if their loans weren’t an issue.

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

“Younger Americans shouldn’t have to choose between education and homeownership, and NAR continues to pursue policies that ensure the American dream remains available and accessible for those still paying off their college education.”

The poll also found that Americans with high student debt burdens are more likely to think twice about buying cars, continuing their education, taking vacations, or starting small businesses. Only 23% report they understood the cost of attending college before taking out loans, and 35% say they inaccurately judged their potential earnings post-college.

Millennials were the most impacted by debt, reporting more cautious spending and anticipation of a loan-free future than other age groups. But Gen Z is set to overtake them. Though they currently only hold 7.87% of student loan debt, Gen Z sees the largest increases per year of any group. They are expected to have the highest rate of college education.

A recent survey found that Gen Z is more interested in homeowning than Millennials, but as debt in their demographic rises, their enthusiasm may dwindle.

President Biden promised to cancel $10,000 in debt per student while campaigning in 2020. He has yet to do so, and his administration hasn’t moved much on reforming flawed relief programs such as the Public Service Loan Forgiveness program.

Here are some highlights from the poll:

  • Thirty six percent of all borrowers delayed moving out of a family member’s home due to debt. For Black borrowers, it’s 52%.
  • Forty two percent said student load debt hasb’t impacted their employment, but the rest said they made them choose disliked or uninteresting jobs, take a second job, or take a job outside their career field.
  • Twenty six percent said they haven’t been able to contribute to a retirement fund at all.