Florida Realtors recently issued the following announcement.
Study: In Florida, total student debt is $75.9 billion owed by 2,197,000 borrowers, according to realtor.com, making it difficult to buy a home.
Total student debt could buy every U.S. house on the market 1.9 times over, according to a study from realtor.com. With the rising costs in education, students borrow more and more money, which has led to delayed homeownership. The average student loan borrower owes $34,500 – $8,500 more than the typical down payment of $26,000.
In Florida, the numbers are similar. Total student debt in the state is $75.9 billion, according to realtor.com, with 2,197,000 borrowers. If these Floridians want to make a 10% down payment on a home, their down payment vs. debt ratio is 72.4%.
“Student debt has ballooned to an all-time high as the price of education continues to outpace wage growth, and this is holding back many potential buyers from being able to purchase a home,” says realtor.com’s Senior Economist, George Ratiu. “Student debt is already impacting borrowers’ ability to buy a home and education debt is expected to hamper consumers’ financial decisions for many years down the road.”
Nationally, the median sale price of a U.S. home is $260,000. With a typical down payment of 10%, that would come out to $26,000, which is $8,500 less than the average student debt of $34,500.
Additionally, the total value of U.S. homes on the market is $780 billion – 1.9 times less than the total outstanding student debt of $1.5 trillion shouldered by 42.8 million borrowers.
At 15.1 million strong, millennials make up 34% of all student borrowers. The generation’s total debt has accumulated to $498 billion – over half the value of all U.S. homes for sale. Millennials have an average balance of $33,000 per borrower, which is $7,000 more than the typical down payment on the median U.S. home. In comparison, the median down payment for millennials is $11,400, according to realtor.com.
“The important implication of rising debt is that young generations are delaying major life decisions,” says Ratiu. “On the real estate front, the affordability crisis in major cities is driving young families to more affordable Midwestern and Southern markets, where savings for a down payment stretch much further and can turn owning a home from a future dream into today’s reality.”
According to a recent NAR report, 26% of millennials cite student loans as the primary barrier to saving up for a down payment. Additionally, 61% of those millennials say their student loans have delayed their home purchase.
Original source can be found here.
Source: Florida Realtors