Impact of Student Loan Debt | Real estate report

(Nov 25, 2022) A widely debated topic, the Biden-Harris student debt relief plan, is still blocked by court orders at this time. Whether you agree with the administration’s plan to alleviate student debt or not, the impact of student debt is a recurring topic in the real estate industry.

The National Association of Realtors (NAR) is conducting a study called “The Impact of Student Loan Debt” which explores the current role of student loan debt and the relationship to home ownership. The results show that student debt is holding back homebuyers.

The most recent report, released in September 2021, explores how the federal government’s stimulus packages and the covid-19 pandemic have affected debt. The majority of the sample report that the covid pandemic has not brought them closer to paying off their student loan debt. However, 38% said the pandemic had helped them financially get closer to paying off their debt.

The largest shares report that the zero interest on the federal debt has allowed them to anticipate monthly payments (16%) and reduced spending in other areas of life, such as entertainment and restaurants, their helped to get closer to repaying student loan debt (13%).

Additionally, using data published in the NAR 2020 Profile of Home Buyers and Sellers, among homebuyers who struggled to save for a down payment, student debt was the top factor delaying their savings and delayed their two-year savings.

Here are some of the key findings from the Impact of Student Loan Debt study:

While the majority say student loan debt had no impact on employment decisions tested (42%), others say debt kept them in hated or uninteresting jobs, forced them to take on a second job or take up a job outside of their chosen field.

More than a quarter of student loan holders say their debt has affected their decision or ability to buy a house (29%), take a vacation (35%) or buy a car (31%).

About half of student loan holders say their debt has affected their life choices. A third say it has impacted their ability to continue their education (33%) while 14% say it has impacted their decision to start a family.

– Lauren Bunting is the official broker for Keller Williams Realty of Delmarva in Ocean City.

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