HOW STUDENT LOAN DEBT HOLDS BACK HOMEBUYERS
According to the National Association of Realtors 2016 Student Loan Debt and Housing Report, the United States currently has a student debt load of $1.3 trillion, accounting for 10 percent of all outstanding debt. As the debt continues to grow, the impact it has on the economy continues to stall economic growth amongst younger generations.
Among recent homebuyers, one-quarter have student loan debt and the typical national average is $25,000.00. More specifically the cost of education comes at a steeper price here, with the average New Jerseyan carrying $29,287 in student loan debt – and that’s just for an undergraduate degree. While residents of the Garden State had the highest median earnings of any state residents with a bachelor’s degree at $59,550,2012 graduates faced an average student debt burden that is 80% higher than those who graduated in 2004. We are seeing a rise in student borrowing, causing students to owe more when they graduate and forgo saving for things like home purchase.
A few important statistics among non-homeowners and the reasons why student loan debt is delaying home purchase:
78% Can’t save for a down payment because of student debt
69% Don’t feel financially secure enough to buy a home because of existing student debt
63% Can’t qualify for a mortgage due to debt-to-income ratio
47% Can’t afford the preferred house or neighborhood
19% Don’t have the financial know-how to confidently navigate the housing market