Student Debt & Home Buying Power
Boo – no shocker here, student debt causes many future homeowners to take a moment’s pause. When they think about the thousands of dollars in student debt they have, is homeownership the first goal on their minds?
According to a new study by realtor.com, total student debt in the U.S. has reached $1.5 trillion, a new all-time high. When broken down, the average student loan borrower owes about $34,500.
That’s $8,500 more than the typical down payment of $26,000.
To put it not so lightly – $1.5 trillion is enough to buy every single home on the market in the U.S. – twice.
Realtor.com’s Senior Economist, George Ratiu, explains, “The important implication of rising debt is that young generations are delaying major life decisions. Student debt is already impacting borrowers’ ability to buy a home and education debt is expected to hamper consumers’ financial decisions for many years down the road.”
The Federal Reserve believes that the increased student loan debts since 2005 have created a 20% decline in homeownership amount young adults.
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