Student loan debt is impacting some first-time Millennial homebuyers. MagnifyMoney, a LendingTree-affiliated online site that helps consumers compare financial products, recently looked at student loan debt and Millennial average net worth. There were some interesting findings.
According to the MagnifyMoney team, “Millennials with student loan debt tend to have larger mortgages on lower-value homes. The home values of millennials younger than 35 with student loan debt are 5% lower than those without student loan debt. The median value of homes for those with unpaid student loans was $157,000 in 2016, while millennial homeowners without student debt had homes with a median value of $165,000.”
Brian Karimzad, co-founder of MagnifyMoney and senior vice president of research at LendingTree, goes behind the numbers with a few surprises. “Homeownership rates are nearly identical to those without student loan debt. About 34% of millennial graduates with student loans are homeowners, while 36% of those without student loans are homeowners.”
Where the equation changes are the price of homes bought by Millennials with student loan debt. “The difference is those with student loan debt are buying homes priced about 5% less than those without. That works out to about $8,000 on a typical home and could reflect a harder time saving for a down payment or being able to qualify for a larger mortgage because of the burden of student loan debt,” Karimzad explains.
According to information from the Federal Reserve,“ between 2001 and 2016, the real amount of student debt owed by American households more than tripled, from about $340 billion to more than $1.3 trillion.”
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