Like first cars or first loves, starter homes are supposed to function as training wheels of sorts to help people prepare until they’re able to upgrade to the real thing.
However, that “starter” home will probably be sticking around longer than most homeowners had anticipated.
A survey by The National Association of Realtors and financial literacy group SALT revealed that almost one-third of homeowners have postponed selling their current home due to student loan repayments. Of that 31 percent, research found that:
- Six percent can’t pay more than the minimum on their mortgage because of student loans
- Seven percent have had student loan debt negatively impact their credit
- Eighteen percent feel purchasing a better home is too expensive
Still, even if these homeowners were able to afford moving on to bigger and better homes, they may struggle finding those who can afford to buy. Even as the appeal of homeownership increases among millennials who make more than $50,000 annually, many can’t buy because of their student loans…
- Fifty-two percent expect home purchasing to be delayed by at least five years because of student debt
- Sixty-three percent can’t qualify for a mortgage due to high debt-to-income ratios
- Sixty-nine percent don’t feel as though they’re financially stable enough to buy
- Eighty percent say they can’t afford a down payment
All the while, the housing market continues at an awkward standstill, with people wanting to buy and others wanting to sell. Neither side can because of the financially crippling nature of our student debt.