The Effect of Student Loan Debt on Homeownership
Writers and Politicians are very concerned about increasing costs of college and student loans on the average young person. The amount of outstanding student debt in the United States in now $1.25 trillon dollare, and debt is a pre-requisite in getting a degree and joining the labor force. This has coincided with a decline in homeownership in the United States to a period we haven't since the 60's with similar low rates for young buyers. As home prices are higher in California, expenses that hurt youn people's ability to save money translate into more drastic effect on the Millennials homeownership in California.
A recent C.A.R poll showed that almost 60% of California's Millennials said that they were concerned about their overall debt; further more student loans were rated as the most worrisome type of debt. In the U.S as a whole, student loans have replaced credit cards as the second most amount of debt held (behind mortgage debt).
Do higher levers of loan debts affect homeownership? As it turns out, having a degree is a much biggher determinant of homeownership that the amount or existence of student debt and that the weak labor market since the "Great Recession: has affected homeownershup more than debt. Between the recession and now, the rate of homeownership has dropped from 35% to 26% for degree holding millennials, and from 23% to 17& for non-degree holding millennials.
There is ample evidence that student loans hinder the ability accumulate wealth and thus delays homeownership. But over the long term this evens out. People have successfully completed