Return to the Latest

Young Adults With Student Debt Struggle to Buy Homes

By: Title Source, August 21, 2012 

When funding their college education, one of the last things on students’ minds might have been how their student loans would affect their ability to buy a home. However, according to a report from Young Invincibles, high student debt has forced many young Americans out of the residential housing market.

The report found that single Americans who carry student debt would have to spend about half of their monthly income on a mortgage, student loan, credit card and car payments, which has made many ineligible for many home loans. Couples with student debt have also faced challenges, especially if both have high balances.

“As educational debt grows, it pushes more borrowers out of the housing market, potentially adding another drag to an economy only just emerging from the Great Recession. More research is needed to understand exactly how student debt impacts the broader economy,” said Rory O’Sullivan, policy director at Young Invincibles.

The cost of higher education will likely price many young Americans out of the home buying market for many years to come, as the Courier Journal said tuition costs are on the rise. Many public universities cost more than $25,000 per year, while private institutions charge double or more than their public counterparts.