Student Loans Keeping Young People From Buying Homes


According to the New York Fed’s latest Quarterly Report on Household Debt and Credit, America’s student loan debt burden has reached a staggering $1.44 trillion as of September 2018. Has that burden kept younger Americans from buying homes?

A new Federal Reserve study suggests that educational debt isn’t the primary reason for the homeownership decline, but it does play a role.

America’s total homeownership percentage fell from 69% to 65% between 2005 and 2014, but homeownership for the age group 24-32 fell from 45% to 36% during the same period. Meanwhile, college debt per capita increased from $5,000 to $10,000 in the same time frame – a debt more likely to affect the age group in question. Are the two trends related?

Fed economists set up probability models to estimate the effect of increased debt on homeownership rates during the study period. According to the models, student loan debt was responsible for 1.8 percentage points out of the 8.8% total …