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You have often heard the myth that student debt keeps most Millennials from purchasing a home.
People have explained that Millennials have purchased more homes over a recent twelve-month period than any other generation, as was reported by the National Association of Realtors).
They explained that the homeownership rate of people aged 25-29 is 34.3%. That is higher than the 33.6% rate members of the previous generation (people currently between the ages of 45-49) achieved when they were that age (as per John Burns Consulting).
Additionally, if you're a Millennial or Gen Z looking for ways to fund your education or future, there are various opportunities such as scholarships that could ease the financial burden. You can find more information about scholarship essays on platforms like MyAssignmentHelp, which offer guidance on writing strong applications. They also explained that a recent survey showed that almost three out of every four (74%) young adults between 18-34 plan to buy a home in the next five years, with 32% planning to do it in the next twelve months.
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However, the reports did not debunk the myth; the same recourse was trumpeted back at them – What about student debt?
The good news is that the facts about student debt are coming to light. Last week, The New York Times posted an article titled The Reality of Student Debt Is Different from the Clichés. This article went into great depth regarding the findings of a new study released by the Brookings Institution, Is a Student Loan Crisis on the Horizon? Which looked at data through 2010. The NYT article quoted critical elements of the report:
- § 58% of young adult households have less than $10,000 in debt. An additional 18% have between $10,000 and $20,000
- § 36% of households with people between the ages of 20 and 40 had education debt, up from 14% in 1989. Some of the increase stems from the good news that more people are attending college.
- § Taking financial aid into account, the average tuition at private (nonprofit) colleges has not increased faster than overall inflation over the last decade.
- § Because the incomes of college graduates have grown since the early 1990s, the share of income that a typical student debtor has to devote to loan payments is only marginally higher than it was in the early 1990s — and somewhat lower than it was in the late 1990s. It was 3.5% in 1992, 4.3% in 1998 and 4% in 2010.
- § The burden for the people with the most debt is significantly lower today than two decades ago. Someone at the 90th percentile of debt had to devote 15% of their income to repayment in 2010, down from 20% in 1992.
Ready to find your dream home in Denver?
Let us help you. Call or Text Kenna Real Estate Group at 303-955-4220 to get personalized assistance from our expert real estate agents.
In summary, this is what they had to say:
“Despite the widely held belief that circumstances for borrowers with student loan debt worsen over time, our findings reveal no evidence supporting this narrative. The average growth in lifetime income among households with student loan debt easily exceeds the average growth in debt, suggesting that, all else equal, households with debt today are in a better financial position than households with debt were two decades ago. Furthermore, the incidence of burdensome monthly payments has not become more widespread over the last two decades.”