Is Student Loan Debt Keeping You From Buying A Home

Dated: 01/30/2019

Views: 85

Over the course of the last thirty years, a shift has happened. An entire generation has been raised to believe that a college education is their key to unlocking opportunities that were not available to their parent’s or grandparent’s generations.

Due to this, student loan debt has soared to $1.5 trillion and represents the largest category of debt, surpassing credit card and auto loan debt in 2010 and never looking back. As more and more Americans continue their education amongst rising tuition costs, this number will no doubt increase.

Many housing experts have blamed student loans for a drop in the homeownership rate for young families, and to an extent, they’ve been right. Increased debt at the time of graduation has no doubt limited young people from being able to afford a home at the same rate as their parents or grandparents did at the same age.

According to Forbes, “in just the class of 2017, the average student has about $40,000 in debt — almost enough for a 20% down payment on a median-priced home.”

TheFederal Reserve set out to determine exactly how much impact student loan debt has had on the homeownership rate of those 18-34 (millennials). Their results found that,  “Every $1,000 in student loan debt delays homeownership by about 2.5 months,but it doesn’t prevent homeownership entirely.  In fact,by the time college grads reach their 30s, those with student loan debt have a homeownership rate nearly identical to those who didn’t take out loans.”

In theWall Street Journal’s coverage of theFed report, they found that recent graduates prioritize paying off their student loans over saving for a down payment, despite their desire to be a homeowner. Many with debt want to“get that monkey off (their) back (before they) make any new investments.”  This has just delayed the wave of young homebuyers from hitting the market. But as Danielle Hale, theChief Economist at realtor.com warns,

“2020 will be peak millennial, the year when the largest number of millennials will turn 30.”

By age 30, those who attained a bachelor’s degree right after high school will be one or two years away from paying off their loans and will have been in their career long enough to earn a higher salary.

In the long run, research shows that attaining a bachelor’s degree or more actually increases the chances that someone will become a homeowner.

Bottom line, if you are one of the many millennials who has prioritized paying down your student loans over saving for a down payment, you’re not alone. Even if you are a couple years away from paying off your loans, meet with a local real estate professional that can help you determine if waiting really is the best decision for you!


Ask me how you can you can get up to $40,000 to pay off your student loans and money towards your down payment, I can show you some options! 


Ijeoma Ezeanya

Licensed Realtor, DC & MD

EXIT Flagship Realty

1221 Caraway Ct. Suite #1050

Upper Marlboro, MD 20774

301-957-0928 (c)

301-841-7551 (o)


Blog author image

Ijeoma Ezeanya

Ambitious, passionate and creative are just a few words that describe Ijeoma and her approach when working with her clients. As a real estate professional, her aim has always been to guide her client....

Latest Blog Posts

Divorce And Selling Your Home

As those who follow my blog, you know this is a personal subject to me and I feel it is important to share with you as I come across great resources. For during this transition in your,

Read More

Buying Property After Separation Or Divorce What You Need To Know

I am a transparent Realtor who have gone through life experiences that many of us will or have encountered, but hoping most won't and that is "DIVORCE".  As a divorced 

Read More

How Well Does Your Home Compare To Other Homes

Comps 101: How Comparables Can Help You Sell Your Home By Kacie Goff  June 13, 2019 in Buying & Selling / Guides & How To's So you want to sell your house.

Read More