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Millennials say student debt blocking them from homeownership
Millennials are having a hard time breaking into homeownership, a new study shows.
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Via Flickr user Kansas Sebastian
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California Association of Realtors
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National Association of Realtors and American Student Assistance
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Millennials say student debt blocking them from homeownership
Crushing student debt is further driving down homeownership in cities like Los Angeles that are already facing high costs and low inventory, according to a new report.
A joint survey of millennials by the National Association of Realtors (NAR) and American Student Assistance showed that the typical student debt load — about $41,000 — is several thousand dollars more than the annual median income of the respondents.
Jessica Lautz, who directs survey research at NAR, said those surveyed typically expect to delay homeownership by seven years.
"As you have fewer homes on the market, prices are just going to rise steeply and more out-of-reach for these consumers," Lautz said.
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National Association of Realtors and American Student Assistance
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That's the case in Los Angeles, which the Census Bureau reports has the third-lowest homeownership rate of the country's top metros, or 50.1 percent. Only the San Jose and New York metros have lower shares of homeowners.
A survey of millennial renters conducted last year by the California Association of Realtors showed that student debt was keeping a quarter of those surveyed from even exploring homeownership.
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California Association of Realtors
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Cody Hounanian can relate. At 26, he’s eager to buy a house in his hometown of Santa Clarita. But he and his family accumulated $100,000 in debt to send him to the University of California Santa Barbara.
"I can completely pay off my debt —which I’m working on — but for now, it’s put my life on hold," Hounanian said.
Hounanian, who now works as an advocate for student borrowers at Student Debt Crisis, said many who can't buy homes feel like they're being "robbed of part of the American dream."
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"When we all imagine what the American dream is about, it doesn't include three roommates in a small apartment," Hounanian said. "It usually includes homeownership and success."
Hounanian hopes to one day join the 20 percent of millennials who own a home. Until then, he’s saving up for his downpayment, living at home with his parents.
The survey, which was conducted in April 2017 among 2,200 millennials, also found that student debt is preventing millennials from saving for retirement, changing jobs, marrying and having children.
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But the game has changed: Congress voted to eliminate funding for public media across the country. Here at LAist that means a loss of $1.7 million in our budget every year. We want to assure you that despite growing threats to free press and free speech, LAist will remain a voice you know and trust. Speaking frankly, the amount of reader support we receive will help determine how strong of a newsroom we are going forward to cover the important news in our community.
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