Student Debt Crushes Homebuying Dreams For Millennials , Now Delayed 8 Years

The student debt crisis is rapidly expanding, hitting a new record high of $1.6 trillion in 2019 and surpassing auto loans and credit card debt post-GFC.

About 44 million Americans, or 20% of adults, have insurmountable student debts. About 11% of them are in student loan default, and by 2023, as many as 40% could be underwater.

The life-altering impacts of student loan debt on millions of millennials is debilitating towards their financial health.

Many are drowning in student debt, working in the gig-economy with two jobs and can hardly afford rising rents and necessary food items.

At least 60% of millennials have no savings, and their poor financial health has contributed to the reason why so many young adults can’t afford a downpayment on their first home.

A new study published by the Urban Institute says the current homeownership rate of young adults is 37%. That’s 8% lower than the homeownership rate Generation X and baby boomers had at the same age.

“If the homeownership rate for millennials had stayed the same as previous generations,” the study noted, “there would be about 3.4 million more homeowners today.”

The study determined that 36% more graduates who had eliminated their debt (or never had any) owned a home and graduates who paid off their debt were 7x more likely to purchase a home.

About 40% of millennials have student debt, according to the AARP, and Clever Real Estate says the student debt has delayed home buying by eight years for millennials.

The Federal Reserve has said that “a $1,000 increase in student loan debt lowers the homeownership rate by about 1.5 percentage points for public 4-year college-goers during their mid-20s, equivalent to an average delay of 2.5 months in attaining homeownership.” So that means with the average student about $37,0000 in debt, that’s a 7.7-year delay in homebuying.

In 2012, about 71% of all millennials graduating from college had a student loan. The average debt load has quickly increased over time, moving to $37,000 from nearly $9,500 in the early 1990s. Today’s levels are 3x higher than 2006 levels.

And it’s not just home buying that has been delayed, many of these millennials have avoided weddings and starting a family because their debts have limited their economic mobility.

According to Douglas McIntyre with 24/7 Wall Street, who examined student loan data from LendEDU, the Deep South struggles with high amounts of credit card debt; student loan debt is heavily concentrated in the Northeast.

History will show millennials will be known as the “lost generation,” as their ability to participate in the American dream of homebuying was cut short by student debt servicing payments. And with the next recession lurking around the corner, millennials could soon find themselves without a job and back in their parents’ basements.

This post has been republished with permission from a publicly-available RSS feed found on Zero Hedge. The views expressed by the original author(s) do not necessarily reflect the opinions or views of The Libertarian Hub, its owners or administrators. Any images included in the original article belong to and are the sole responsibility of the original author/website. The Libertarian Hub makes no claims of ownership of any imported photos/images and shall not be held liable for any unintended copyright infringement. Submit a DCMA takedown request.

Read the original article.

About The Author

Tyler Durden

Zero Hedge's mission is to widen the scope of financial, economic and political information available to the professional investing public, to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become, to liberate oppressed knowledge, to provide analysis uninhibited by political constraint and to facilitate information's unending quest for freedom. Visit

Leave a reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Bringing together a variety of news and information from some of today’s most important libertarian thought leaders. All feeds are checked and refreshed every hour and pages auto-refresh every 15 minutes. External images are deleted after 30 days.

Time since last refresh: 0 second

Publish Your Own Article

Follow The Libertarian Hub

Please consider donating using any of the cryptocurrencies below or use the Brave browser to tip using Basic Attention Tokens (BAT). Your anonymous contributions help keep this website running for everyone to enjoy!


Take Control of Your Domain Names
The Ultimate Managed Hosting Platform

Weekly Newsletter

Newsletter Signup

Subscribe to our newsletter to receive a weekly email report of the top five most popular articles on the Libertarian Hub!

Weekly Newsletter SignupTop 5 Stories of the Week

Subscribe to our newsletter to receive a weekly email report of the top five most popular articles on the Libertarian Hub!