Student Loan Debt and Housing Report 2016 · Debt delaying potential home buyers is highest among those with more than $50,000 in student loan debt—about eight in ten believe it

Student Loan Debt and Housing Report 2016

When Debt Holds You Back

National Association of REALTORS® Research Department And SALT®

Introduction

The U.S. currently has a student debt load of $1.3 trillion, which accounts for 10

percent of all outstanding debt. The magnitude of the debt continues to grow in

size and share of the overall debt in the economy. While this amount of debt

has risen, the homeownership rate has fallen, and fallen more steeply among

younger generations. From the National Association of REALTORS® Profile of

Home Buyers and Sellers, among recent home buyers, one-quarter have student

loan debt and the typical amount is $25,000. The share of those with student

loan debt rises to 41 percent among first-time home buyers. Even among

successful home buyers this amount of debt is cited as a difficulty in their home

buying process. To evaluate those trends SALT® and the National Association of

REALTORS® teamed up to conduct a survey of student loan borrowers who

are current in repayment.

The results of the survey demonstrate the impact that student loans, even

amongst those who are managing to pay their bills on a timely schedule, have on

their housing situation. Among survey respondents, 67 percent received their

loans from a four-year college, 31 percent from a two-year college, 27 percent

from graduate/post-graduate school, and 11 percent from a technical college.

Twenty-two percent were delayed by at least two years in moving out of a

family member’s home after college due to their student loans. While 18

percent are currently homeowners, 17 percent live with friends or family and

do not currently pay rent.

Among non-homeowners, 71 percent cite student loan debt as the factor

delaying them from buying a home. This is most frequently the case due to the

fact that the borrowers cannot save for a downpayment because of their

student debt. Among homeowners, 31 percent say student debt is impacting

the ability to sell their existing home and move to a different home. The delay

in buying a home among non-homeowners and homeowners is five years.

2016 Student Loan Debt and Housing Report

The Survey Respondent Demographics

Where debt is from:

◦ Four-year college: 67%

◦ Two-year college: 31%

◦ Graduate/post-graduate: 27%

◦ Technical school: 11%

Length since enrollment:

◦ Currently enrolled: 28%

◦ Less than a year: 19%

◦ 1-3 years: 43%

◦ 4-6 years: 8%

◦ More than 6 years: 3%

Type of higher education institution:

◦ Public: 66%

◦ Private: 46%

◦ For-profit: 6%

Who has debt within household:

◦ Survey respondent: 95%

◦ Spouse/partner: 20%

◦ Roommate: 8%

◦ Sibling: 6%

◦ Child/dependent: 4%

Employment status:

◦ Employed: 71%

◦ Employed part-time, seeking full-time:

14%

◦ Seeking employment: 10%

◦ Not seeking employment: 6%

%

2%

4%

6%

8%

10%

12%

14%

16%

3%

7%

13%

16%

14%

10%

15%

9%

14%

Student Loan Debt Amount


Student Loan Debt Delayed Decision to Move Out of Family Member's Home After College

While 58 percent of student loan borrowers did not delay moving out of a

family member’s home after college, 42 percent did delay their move.

Twenty-four percent delayed moving out of a family member’s home after

college for at least two years.

Younger Millennials (born 1990 to 1998) and those with 2015 personal

incomes under $25,000 were the most likely to delay moving out of a

family home.

Those who graduated six to 10 years ago had the longest delay—33

percent were delayed more than two years from moving out of a family

member’s home. In comparison, for those who graduated less than a year

ago, only 17 percent were delayed more than two years.


%

10%

20%

30%

40%

50%

60%

Did not

delay

moving into

own place

Less than 6

months

7 months-1

year

More than

1 year, but

less than 2

years

2-5 years More than

5 years

58%

4% 7% 9%

15%

7%

Delay Moving Out of Family Member’s Home After

College

Student Loan Debt Delayed Decision to Move Out of Family Member's Home After College


Generation:

Younger

Millennials (born 1990-1998)

Older


Gen X

(born 1965-1979)

Younger

Boomers (born 1955-1964)

Older


Did not delay moving

into own place 41% 60% 79% 80% 77%

Less than 6 months 6 2 1 2 2

7 months-1 year 12 7 3 3 5

More than 1 year,

but less than 2 years 15 7 4 2 5

2-5 years 21 15 7 7 2

More than 5 years 6 9 6 6 9

Student Loan

Debt Amount: $1 to

$5,000

$5,001 to

$10,000

$10,001 to

$20,000

$20,001 to

$30,000

$30,001 to

$40,000

$40,001 to

$50,000

$50,001 to

$70,000

$70,001 to

$100,000

More than

$100,000

Did not delay moving into

own place 56% 59% 61% 57% 58% 63% 56% 56% 58%

Less than 6 months 2 3 3 5 3 3 2 3 5

7 months-1 year 12 9 6 7 6 5 11 6 7

More than 1 year, but less

than 2 years 9 10 9 11 11 6 9 8 9

2-5 years 13 15 13 15 17 15 13 20 16

More than 5 years 8 5 8 5 6 8 9 7 6

2015 Personal Income: Less than $25,000

$25,000 to $49,999

$50,000 to $74,999

More than $75,000

Did not delay moving into own place 54% 59% 68% 75%

Less than 6 months 4 3 4 1

7 months-1 year 8 7 8 4

More than 1 year, but less than 2 years 9 10 9 5

2-5 years 16 15 10 12

More than 5 years 9 6 2 3

Current Living Arrangement

Most commonly, 21 percent of respondents rent with roommates.

Nineteen percent live with friends or family and pay rent, while 17 percent

live with friends and family and do not pay rent.

Eighteen percent own their own home and 17 percent rent solo.

Owning a home is least common among Younger Millennials, at five percent,

and most common among Gen Xers and Baby Boomers, at one-third.

Forty-six percent of Younger Millennials live with family (both paying and

not paying rent) compared to just 25 percent of Gen Xers.

Living with family is also most common among those with lower student

loan debt levels.


%

5%

10%

15%

20%

25%

Own a home Rent solo Rent with

roommates

Live with

friends/

family

without

paying rent

Live with

friends/

family and

pay rent

Other

18% 17%

21%

17% 19%

8%




Generation:

Younger


Older


Gen X

(born 1965-1979)

Younger


Older


Own a home 5% 17% 34% 32% 34%

Rent solo 10 21 23 19 32

Rent with roommates 33 23 8 8 0

Live with friends/ family without paying rent 28 11 7 10 11

Live with friends/ family and pay rent 18 20 18 22 14

Other 6 7 11 10 9

Student Loan

Debt Amount: $1 to

$5,000

$5,001 to

$10,000

$10,001 to

$20,000

$20,001 to

$30,000

$30,001 to

$40,000

$40,001 to

$50,000

$50,001 to

$70,000

$70,001 to

$100,000

More than

$100,000

Own a home 15% 16% 19% 17% 19% 20% 19% 18% 18%

Rent solo 18 20 16 17 15 20 18 14 19

Rent with roommates 18 17 17 19 22 22 22 28 26

Live with friends/ family without paying rent 19 18 16 18 18 14 17 20 15

Live with friends/ family and pay rent 25 21 24 21 18 16 18 14 16

Other 6 8 8 8 8 9 6 6 7


$25,000 to $49,999

$50,000 to $74,999

More than $75,000

Own a home 10% 21% 35% 36%

Rent solo 16 19 19 15

Rent with roommates 22 23 22 14

Live with friends/ family without paying rent 22 14 6 11

Live with friends/ family and pay rent 23 16 12 13

Other 8 6 6 12

Among NON-Homeowners: Student Loan Debt Delaying From Buying a Home

Among non-homeowners, 71 percent believe their student loan debt has

delayed them from buying a home.

Among Older Millennials, 79 percent believe their student loan debt is

delaying them from buying a home.

Debt delaying potential home buyers is highest among those with more

than $50,000 in student loan debt—about eight in ten believe it is delaying

their ability to purchase a home.


%

10%

20%

30%

40%

50%

60%

70%

80%

Yes, impacted No, student

loan debt had

no impact on

ability to

purchase

No, ability to

purchase a

home is a result

of attending

higher

education and

improved long-

term economic

stability

Don't know Don't want to

own

71%

5% 2%

13% 10%

Non-Homeowners: Delay from Buying a Home

Among NON-Homeowners: Student Loan Debt Delaying From Buying a Home


Generation:

Younger


Older


Gen X

(born 1965-1979)

Younger


Older


Yes, impacted 67% 79% 71% 64% 66%

No, student loan debt had no impact on ability to purchase 4 3 5 9 10

No, ability to purchase is a result of attending higher education and improved long-term economic stability 2 2 2 2 3

Don't know 13 9 17 12 7

Don't want to own 14 6 5 13 14

Student Loan Debt

Amount: $1 to

$5,000

$5,001 to

$10,000

$10,001 to

$20,000

$20,001 to

$30,000

$30,001 to

$40,000

$40,001 to

$50,000

$50,001 to

$70,000

$70,001 to

$100,000

More than

$100,000

Yes, impacted 56% 55% 60% 67% 70% 75% 78% 85% 80%

No, student loan debt had no impact on ability to purchase 14 7 7 6 5 4 2 2 2

No, ability to purchase is a result of attending higher education and improved long-term economic stability 3 4 3 2 3 2 1 1 2

Don't know 14 18 17 16 13 11 8 5 10

Don't want to own 13 15 13 10 9 7 11 7 5


$25,000 to $49,999

$50,000 to $74,999

More than $75,000

Yes, impacted 66% 77% 83% 68%

No, student loan debt had no impact on ability to purchase 5 5 3 3

No, ability to purchase a home is a result of attending higher education and improved long-term economic stability 2 2 3 3

Don't know 16 9 5 16

Don't want to own 12 8 6 11

Among NON-Homeowners: Reasons Why Student Loan Debt is Delaying Home Purchase

Among non-homeowners who believe their student loan debt is delaying

their ability to purchase a home, 78 percent believe the cause is the inability

to save for a downpayment because of debt.

Sixty-nine percent of those who are delayed don’t feel financially secure

enough and 63 percent can’t qualify for a mortgage due to debt-to-income

ratios.

Millennials are more likely to have a difficulty saving for a downpayment and

Gen Xers and Baby Boomers are more likely to have high debt-to-income

ratios.


% 20% 40% 60% 80%

Don't have financial know-how to confidently

navigate the housing market

Can't afford the preferred house or

neighborhood

Can't qualify for a mortgage due to debt-to-

income ratio

Don't feel financially secure enough because

of existing student debt to buy a home

Can't save for a downpayment because of

student debt

19%

47%

63%

69%

78%

Reasons for Delay Buying a Home

Among NON-Homeowners: Reasons Why Student Loan Debt is Delaying Home Purchase


Generation:

Younger


Older


Gen X

(born 1965-1979)

Younger


Older


Can't save for a downpayment because of student debt 83% 82% 68% 64% 63%

Don't feel financially secure enough because of existing student debt to buy a home 81 70 50 48 63

Can't qualify for a mortgage due to debt-to-income ratio 53 69 74 70 79

Can't afford the preferred house or neighborhood 50 52 39 24 47

Don't have financial know-how to confidently navigate the housing market 25 18 13 10 5

Student Loan Debt

Amount: $1 to

$5,000

$5,001 to

$10,000

$10,001 to

$20,000

$20,001 to

$30,000

$30,001 to

$40,000

$40,001 to

$50,000

$50,001 to

$70,000

$70,001 to

$100,000

More than

$100,000

Can't save for a downpayment because of student debt 70% 64% 70% 76% 77% 75% 83% 89% 84%

Don't feel financially secure enough because of existing student debt to buy a home 53 54 62 64 73 67 72 72 76

Can't qualify for a mortgage due to debt-to-income ratio 40 68 57 55 58 67 68 72 64

Can't afford the preferred house or neighborhood 38 35 39 43 42 49 50 56 55

Don't have financial know-how to confidently navigate the housing market 30 14 20 16 20 19 17 18 21


$25,000 to $49,999

$50,000 to $74,999

More than $75,000

Can't save for a downpayment because of student debt 75% 82% 86% 67%

Don't feel financially secure enough because of existing student debt to buy a home 68 71 69 58

Can't qualify for a mortgage due to debt-to-income ratio 64 66 54 48

Can't afford the preferred house or neighborhood 42 50 55 48

Don't have financial know-how to confidently navigate the housing market 21 19 11 18

Among Homeowners: Student Loan Debt Delaying From Selling a Home and Buying Another

Thirty-one percent of current homeowners with student loan debt are also

facing housing hurdles and are unable to sell their existing home and buy

another property.

These homeowners face a variety of problems: 18 percent believe it is too

expensive to move and upgrade to a new home, 7 percent have problems

with their credit caused by student loan debt, and 6 percent are

underwater on their home.

Older Boomers are most likely to say that it is too expensive to move and

upgrade to a new home and Younger Boomers are most likely to have

credit problems from their student loan debt.


% 10% 20% 30% 40%

Yes, underwater on house because student

loan debt has limited ability to pay more

than just the bare minimum on home

Yes, problems with student loans have

impacted credit for a future mortgage

Yes, too expensive to move and upgrade to

a new home

No, student loan debt did not delay selling

home

Don't know

6%

7%

18%

33%

36%

Among Homeowners: Delay Selling and Buying a New

Home

Among Homeowners: Student Loan Debt Delaying From Selling a Home and Buying Another


Generation:

Younger


Older


Gen X

(born 1965-1979)

Younger


Older


Yes, too expensive to move and upgrade to a new home 11% 21% 19% 22% 33%

Yes, problems with student loans have impacted credit for a future mortgage 2 5 7 19 10

Yes, underwater on house because student loan debt has limited ability to pay more than just the bare minimum on home 2 6 10 4 5

No, student loan debt did not delay selling home 32 34 32 36 29

Don't know 54 33 31 19 24

Student Loan Debt

Amount: $1 to

$5,000

$5,001 to

$10,000

$10,001 to

$20,000

$20,001 to

$30,000

$30,001 to

$40,000

$40,001 to

$50,000

$50,001 to

$70,000

$70,001 to

$100,000

More than

$100,000

Yes, too expensive to move and upgrade to a new home 9% 12% 11% 15% 19% 16% 29% 22% 31%

Yes, problems with student loans have impacted credit for a future mortgage 6 4 5 7 5 5 7 8 9

Yes, underwater on house because student loan debt has limited ability to pay more than just the bare minimum on home 1 4 3 7 12 8 18 4

No, student loan debt did not delay selling home 43 41 43 40 37 28 28 21 17

Don't know 43 41 37 35 32 38 28 32 39


$25,000 to $49,999

$50,000 to $74,999

More than $75,000

Yes, too expensive to move and upgrade to a new home 12% 19% 30% 28%

Yes, problems with student loans have impacted credit for a future mortgage 5 8 6 8

Yes, underwater on house because student loan debt has limited ability to pay more than just the bare minimum on home 3 8 11 5

No, student loan debt did not delay selling home 32 37 30 32

Don't know 48 29 24 26

Among Non-Homeowners and Homeowners Delayed: Length of Time Delayed From Purchasing

Both non-homeowners and homeowners expect to be delayed more than

five years from purchasing a home. One in five expect to be delayed three

to five years.

Six in ten Baby Boomers expect to be delayed for more than five years.

Those with higher amounts of student loan debt and those with lower

incomes expect to be delayed longer from purchasing a home than those

with higher incomes and lower amounts of debt.


Did not delay,

purchased a home

when ready

5% 0-6 months

1% 6 months-1 year

2%

1-2 years

7%

2-3 years

12%

3-5 years

21%

More than 5 years

52%

Length of Time Delay from Purchasing

Among Non-Homeowners and Homeowners Delayed: Length of Time Delayed From Purchasing


Generation:

Younger


Older


Gen X

(born 1965-1979)

Younger


Older


Did not delay, purchased a home when ready 2% 4% 10% 7% 0

0-6 months 1 1 0 2 0

6 months-1 year 2 2 1 1 7

1-2 years 8 8 6 5 0

2-3 years 15 12 12 8 7

3-5 years 24 21 20 14 24

More than 5 years 49 52 51 62 62

Student Loan Debt

Amount: $1 to

$5,000

$5,001 to

$10,000

$10,001 to

$20,000

$20,001 to

$30,000

$30,001 to

$40,000

$40,001 to

$50,000

$50,001 to

$70,000

$70,001 to

$100,000

More than

$100,000

Did not delay, purchased a home when ready 4% 8% 4% 5% 4% 6% 4% 5% 3%

0-6 months 2 1 1 1 0 0 1 0 1

6 months-1 year 7 1 3 1 4 2 2 1 2

1-2 years 18 11 6 9 5 7 8 7 6

2-3 years 20 21 18 14 14 12 9 10 7

3-5 years 18 23 27 23 25 17 17 18 21

More than 5 years 31 35 42 47 49 57 59 59 61


$25,000 to $49,999

$50,000 to $74,999

More than $75,000

Did not delay, purchased a home when ready 2% 4% 9% 11%

0-6 months 1 1 1 1

6 months-1 year 2 3 1 2

1-2 years 7 7 7 7

2-3 years 10 14 15 15

3-5 years 22 20 23 23

More than 5 years 56 51 45 42

Student Loan Debt Effected Either Decision and/or Ability To Do

More than six in ten student loan borrowers believe student loan debt has

effected their ability to take a vacation or purchase a home.

About half of borrowers believe student loan debt has impacted their

ability to rent solo or change their current living situation.

Seventy-two percent of Older Millennials believe their ability to purchase a

home was effected and 68 percent of Younger Millennials say their ability to

rent solo or change their living situation was effected by their student loan

debt.


% 20% 40% 60% 80%

None of these

Own a pet

Rent or own closer to work or school

location

Start a small business

Purchase daily necessities

Purchase clothes

Purchase entertainment

Rent solo or change living situation

Continue with education

Purchase a car

Purchase a home

Take a vacation

8%

17%

28%

33%

38%

41%

43%

49%

55%

57%

62%

66%

Student Loan Debt Effected

Student Loan Debt Effected Either Decision and/or Ability To Do


Generation:

Younger


Older


Gen X

(born 1965-1979)

Younger


Older


Take a vacation 70% 72% 60% 57% 51%

Purchase a home 64 72 55 46 51

Purchase a car 61 62 52 48 49

Continue with education 64 55 48 43 37

Rent solo or change living situation 68 47 27 29 40

Purchase entertainment 49 47 34 33 37

Purchase clothes 45 44 34 30 40

Purchase daily necessities 40 42 32 29 42

Start a small business 32 38 30 27 35

Rent or own closer to work or school location 39 29 15 12 14

Own a pet 24 17 9 3 14

None of these 5 6 13 12 5

Student Loan Debt

Amount: $1 to

$5,000

$5,001 to

$10,000

$10,001 to

$20,000

$20,001 to

$30,000

$30,001 to

$40,000

$40,001 to

$50,000

$50,001 to

$70,000

$70,001 to

$100,000

More than

$100,000

Take a vacation 43% 49% 63% 61% 65% 67% 73% 79% 77%

Purchase a home 40 41 55 58 63 62 69 72 76

Purchase a car 33 46 55 58 59 57 62 62 65

Continue with education 39 46 61 57 62 56 61 60 42

Rent solo or change living situation 36 38 45 49 49 47 51 58 55

Purchase entertainment 28 37 39 40 42 42 46 50 57

Purchase clothes 27 34 34 35 40 40 46 51 53

Purchase daily necessities 36 30 30 32 40 33 43 47 49

Start a small business 19 20 26 31 29 33 40 46 44

Rent or own closer to work or school location 22 18 23 26 26 25 28 37 37

Own a pet 9 9 13 15 15 13 16 26 27

None of these 18 14 11 9 7 8 4 3 5


$25,000 to $49,999

$50,000 to $74,999

More than $75,000

Take a vacation 64% 71% 68% 63%

Purchase a home 60 66 65 55

Purchase a car 60 57 57 49

Continue with education 56 59 46 45

Rent solo or change living situation 54 49 35 31

Purchase entertainment 44 45 41 35

Purchase clothes 43 42 38 29

Purchase daily necessities 41 38 30 30

Start a small business 32 36 36 25

Rent or own closer to work or school location 28 30 25 16

Own a pet 19 16 15 7

None of these 8 6 7 11

Methodology

In April 2016, SALT® distributed a 33 question survey written by NAR and SALT®

to 75,000 student loan borrowers who are currently in repayment. A total of

3,230 student loan borrowers completed the survey. The survey had a response

rate of 4.3 percent.

All information is characteristic of April 2016, with the exception of income data,

which is reflective of 2015. The median is the primary statistical measure used

throughout this report. Due to rounding, percentage distributions may not add to

100 percent.

©2016 National Association of REALTORS® and American Student Assistance®.

All Rights Reserved.

May not be reprinted in whole or in part without permission of the National

Association of REALTORS® and American Student Assistance®.

For reprint information, contact [email protected].


mailto:[email protected]

American Student Assistance® (ASA) is a private nonprofit dedicated to

eliminating finance as a barrier to education and the dreams education

enables. ASA® helps people make better decisions about financing higher

education and repaying student loans, so they can become confident,

financially competent consumers. After working with millions of student

borrowers as a federal student loan guarantor, ASA combined 60 years of

knowledge and best practices into a powerful consumer literacy program

called SALT®. Working with more than 300 higher education institutions,

nonprofits, and corporations nationwide, SALT (saltmoney.org) provides

the tools and resources students need to better understand how to pay

for and pay back college costs.


saltmoney.org

The National Association of REALTORS®, “The Voice for Real Estate,”

is America’s largest trade association, representing 1.1 million members, including

NAR’s institutes, societies and councils, involved in all aspects of the real estate

industry. NAR membership includes brokers, salespeople, property managers,

appraisers, counselors and others engaged in both residential and commercial

real estate.

The term REALTOR® is a registered collective membership mark that identifies a

real estate professional who is a member of the National Association of REALTORS®

and subscribes to its strict Code of Ethics.

Working for America’s property owners, the National Association provides a facility for

professional development, research and exchange of information among its members

and to the public and government for the purpose of preserving the free enterprise

system and the right to own real property.

NATIONAL ASSOCIATION OF REALTORS®

RESEARCH DIVISION

The Mission of the National Association of REALTORS® Research Division is to collect

and disseminate timely, accurate and comprehensive real estate data and to conduct

economic analysis in order to inform and engage members, consumers, and policymakers

and the media in a professional and accessible manner.

To find out about other products from NAR’s Research Division, visit

www.REALTOR.org/research-and-statistics.

NATIONAL ASSOCIATION OF REALTORS®

Research Division

500 New Jersey Avenue, NW

Washington, DC 20001

202-383-1000

[email protected]


http://www.realtor.org/research-and-statistics





mailto:[email protected]

Documents

Student Loan Debt and Housing Report 2016 · Debt delaying potential home buyers is highest among those with more than $50,000 in student loan debt—about eight in ten believe it