Economists' Outlook

Housing stats and analysis from NAR's research experts.

Student Loan Debt Adversely Affecting Millennials

In NAR’s first report on student loan debt in 2016, survey respondents were among a wide age range, from Millennials to Generation X to Baby Boomers and the Silent Generation. This year, the Student Loan Debt and Housing Report 2017 focuses exclusively on younger millennials (born 1990 to 1998) and older millennials (born 1980 to 1989). The report findings are staggering: millennials as a whole made a median of $38,800 in annual income in 2016 and have a median student loan debt of $41,200 in the same year. They have also been delayed from buying a home for a median of seven years.

Let’s examine these two groups in more depth. Fifty-two percent of survey respondents were younger millennials and 48 percent were older millennials. For all respondents, 84 percent are working full-time. Older millennials were more likely to have defaulted or have forbore on a student loan debt at 35 percent, compared to younger millennials at 27 percent. Two-thirds of all millennials have never defaulted or forborne (67 percent for younger and 62 percent for older millennials).


For younger millennials, student loan debt influenced their ability to purchase a home (76 percent), take a vacation (72 percent), continue with education (71 percent), and rent on their own or change living arrangement (66 percent). For older millennials, student loan debt influenced their ability to purchase a home (78 percent), take a vacation (74 percent), purchase a car (67 percent), and continue with education (57 percent). If the millennials did not have to make payments on their student loan debt, respondents noted that they would put the extra money towards savings (71 percent), investments (65 percent), and buying a home (63 percent).

Younger millennials most frequently live with roommates (35 percent), followed by live with family or friends without paying rent (20 percent). Older millennials more frequently own a home (29 percent), followed by live with roommates (23 percent). Older millennials have been able to make the jump from renting to owning a home of their own. Of the older millennials that own a home, 27 percent were delayed from selling their home because they felt it was too expensive to move or upgrade to a new home. Nearly a quarter of younger millennials were delayed two to five years from moving out of a family member’s home (24 percent), compared to 15 percent of older millennials.

Eighty percent for younger millennials and 86 percent for older millennials that are non-homeowners said that student loan debt delayed them from buying a home. The main reason cited for the delay was that they could not save for a downpayment because of the student loan debt (86 percent for both millennial groups). Younger millennials cited more frequently than older millennials that they did not feel financially secure enough because of existing student loan debt. Whereas older millennials cited more frequently than younger millennials that they could not qualify for a mortgage because of debt-to-income ratio. Fifty-three percent of younger millennials and 45 percent of older millennials said they were delayed three to eight years from purchasing a home due to student loan debt.