Student Loan Debt: Ongoing Hurdle to Homeownership

The U.S. currently has a student debt load of over $1.4 trillion, which accounts for 10 percent of all outstanding debt and 35 percent of non-housing debt. The magnitude of the debt continues to grow in size and share of the overall debt in the economy. While this amount of debt has risen, the homeownership rate has fallen, and fallen more steeply among younger generations. To evaluate those trends, SALT® and the National Association of REALTORS® (NAR) teamed up to conduct a survey of student loan borrowers who are currently in repayment in a new report entitled “Student Loan Debt and Housing Report: When Debt Holds You Back.” Notably, the median student loan debt amount is $41,200.

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Among non-homeowners, 83 percent cite student loan debt as the factor delaying them from buying a home. This is most frequently the case due to the fact that the borrowers cannot save for a down payment because of their student debt. Seventy-four percent of those who are delayed don’t feel financially secure enough, and 52 percent can’t qualify for a mortgage due to debt-to-income ratios.

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Among homeowners, 28 percent say student debt has impacted their ability to sell an existing home and move to a…