According to a report from the National Association of Realtors, many participants in a survey, who had to pay their student loan debt on a monthly basis, said that the debt has prevented them from having a new home.
Half of 3,230 participants believe that the debt payments have delayed their home ownership plans by more than half a decade.
The report is extremely important as U.S. student debt continues to pile up after having reached a historic record of $1.3 trillion. Past reports had shown that some graduates were financially worse than if they never went to college.
The association’s Lawrence Yun said that student loan debt is now an obstacle to the American Dream. Mr. Yun has debated the issue with congressional members earlier this month.
The report also shows that 40 percent of borrowers were prevented from leaving their parents’ homes by the student debt. Yun explained that the situation of graduates is now worse because student debt has tripled over the last ten years.
Most borrowers now struggle with debts of $20,000 to $30,000. In the early 1990s, student loan debt was no larger than $10,000 on average.
A study conducted by the George Washington University with aid from Treasury Department economists shows that borrowers earn less than they did if they never accessed higher education.
Federal investigators found that more than a million students made $600 to $700 less money after contracting a loan than six years prior college admission. However, the worst incomes affected students who never graduated.
The Realtor report also shows that 83 percent of Millennials born in the 1990s said that they were not able to save for their first home because of student debt. A study earlier this year showed that 65 Millennials believe that owning a home is a good way towards wealth.
Yun is not convinced that student loan debt could bring an equilibrium between supply and demand in a housing market marked by a declining inventory. He believes that the Millennial generation should be also given the chance of owning a home.
The latest report also shows that students on the West coast have the harder times in owning a home as housing costs are significantly higher there. Yet, the report didn’t find that students with a debt no longer buy a home.
About 41 percent said that they purchased their first home despite the payment on student loan debt.
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