First-time home buyers and millennials are having a pretty difficult time keeping pace in the current housing market, and student loan debt is a significant part of the problem. The National Association of Realtors and American Student Assistance study, Student Loan Debt and Housing Report for 2017, provides a number of interesting examples of how debt is keeping home purchase activity subdued. The study

The amount of student loans in the United States now exceeds $1.45 trillion, and the growth shows no signs of slowing. One of the more interesting findings of the study is that a large percentage of borrowers had a poor understanding of the costs they would be incurring…

  • Before attending college, 28 percent of borrowers knew generally the
    school “might be expensive” or “might be cheap”, but had no further
  • More than one-quarter of borrowers had an understanding of tuition, but
    had little understanding of other costs such as fees and housing expenses.
  • One in five borrowers understood all the costs including tuition, fees, and

That poor understanding of finance and the debts that come with it are having significant impacts on important life decisions as borrowers struggle to keep up. Buying a home, starting a family and even continuing education are more complicated choices as the pile of student debt grows larger.

student loan debt impacts

Student loan debt growth, much like out-of-control medical care costs, are seriously impacting the ability of Americans to buy homes. This is before you even get to the discussion of how home price growth itself is putting the dream of home ownership out of reach for many people. It’s a good sign that NAR is looking at how student loan debt is delaying household formation, home buying and saving. That being said, there are multiple factors straining home affordability in the United States, and we need to work on addressing all of them in a sustainable fashion.

Student Loan Debt Amounts