Student Loans Keeping You From Buying A Home? Think Again

Student Loans Keeping You From Buying A Home? Think Again

Student loan debt has long been cited as one of the Millennial generation’s biggest barriers to homeownership. But it seems the hurdle might not be as insurmountable as many think.

Related Resources

easy personal loans with no credit check

Americans currently owe a collective $1.5 trillion in student loans, according to Student Loan Hero. 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.

Naturally, that debt is going to affect these young graduates’ homebuying opportunities – but does it dash them entirely? Definitely not.

According to a 2017 study from the Federal Reserve, 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.

Odeta Kushi, a senior economist for First American, said that extended loan terms, higher incomes and the lower payment-to-income ratios that result from these factors are helping minimize the impact student loan debt has on homeownership.

Millennials’ investment in education is paying off, resulting in higher incomes than previous generations at the same age, she said. Millennials in their 30s have higher median incomes compared with Baby Boomers when they were in their 30s and are on track to surpass Generation X.

First Am’s recent Real Estate Sentiment Index shows that inventory levels and overall affordability are the biggest barriers to homeownership for today’s buyers. According to Kushi, myths surrounding down payment sizes are also a factor.

Persistent myths regarding down payment may be discouraging would-be Millennial homebuyers, she said. Many millennials could qualify for a mortgage and may indeed have the income to afford a house, but misperceptions regarding down payment may be holding them back.

Kushi said many Millennials believe that a 20% down payment is required to buy a home. Most first-time buyers only put down between 5% and 10%.

Want to buy a home but have thousands in student loan debt? Here’s what Freedom Debt Relief’s Michael Micheletti recommends:

  1. Understand your entire debt portfolio, your debt-to-income ratio and your FICO guaranteedinstallmentloans.com/payday-loans-mi.
  2. Investigate local, municipal and national down payment assistance programs. There are often tens of thousands of dollars available.
  3. Looking into a shared equity program for the down payment.

This article was written by Aly J. Yale from Forbes and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

Up Next

  • Security |
  • Accessible Banking |
  • Privacy Policy |
  • Terms & Conditions |
  • Legal

News content is provided by third parties and such content does not reflect the views, opinions or policies of PNC. PNC is not the owner of this content and does not provide any warranty, guarantee, or promise, express or implied, concerning the accuracy, completeness, or currency of such content. PNC is not responsible for the content, information, or services which may appear on any off-site webpages or links referenced herein. Such references and links are provided for convenience only and do not imply any kind of endorsement by PNC of those webpages or links, or any endorsement of the content or material therein.

PNC is a registered service mark of The PNC Financial Services Group, Inc. (PNC). All loans are provided by PNC Bank, National Association, a subsidiary of PNC, and are subject to credit approval and property appraisal. This information is provided for business and professional uses only and is not to be provided to a consumer or the public. This information is provided to assist real estate professionals and is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. Programs, interest rates, and fees are subject to change without notice.

PNC is a registered service mark of The PNC Financial Services Group, Inc. (PNC). All loans are provided by PNC Bank, National Association, a subsidiary of PNC, and are subject to credit approval and property appraisal.

Read a summary of privacy rights for California residents which outlines the types of information we collect, and how and why we use that information.

Leave a Comment

Your email address will not be published.

Scroll to Top