Are Student Loans Upending Homebuying in Riverside, by Briana Frazier.

Are Student’s Loans Upending Homebuying in Riverside?

By Briana Frazier

Every young person’s dream is to graduate from high school and live a good and affluent life. Owning a home is the main financial step that school graduates aspire to take, however, due to student loan debt, this goal is shattered. As a result, most millennials prefer to rent or live with their parents. According to research by Jain Family Institute, rising student debt has become a serious impediment to homeownership, particularly among relatively high-income young borrowers. The research raises the question, “What is the value of a college degree?” In each year of the 10-year analysis, higher student debt is associated with decreased homeownership among young adults earning $100,000 or more. The rate of homeownership among student borrowers aged 18 to 35 has plummeted by 24 percent over the last decade indicated by the research.

For most Americans, homeownership has long played an essential part in establishing financial stability. Published by the Federal Reserve 2021 Survey of Consumer Finances, homeowners had a median net worth of $255,000, compared to $6,300 for renters. A study by Eduard Nilaj proves that, as the number of Americans going to college grows, the average student borrower becomes poorer. As the cost of higher education has risen, so has the cost of student loans. For a decade, student debtors’ median estimated income fell from $82,765 to $67,364. At the same time, the proportion of those having a $25,000 or more outstanding student loan balance has increased.

The pandemic may have had some positive consequences, since the government’s moratorium on student-loan payments, just extended for another three months, has allowed some middle- and highincome student-loan borrowers to purchase a home, nevertheless, the rise in property prices, on the other hand, has been a deterrent, and only debt cancellation or a significant fall in interest rates are likely to have an impact on homeownership. It is said that, instead of paying a mortgage for a home, young people incur student-loan obligations that are similar to mortgage loans in terms of the payment schedule and outstanding balance.

According to a poll conducted by apartment listings, the absence of a down payment is the biggest barrier to buying a home for 62 percent of millennial renters. Only 4.4 percent of the 89.4% of potential first-time homeowners predicted it would happen in the next year, while 30.4 predicted it would happen in the following five years or longer. According to the study, “We estimate that 23 percent of college graduates without student debt can save enough for a down payment within the next five years. Compared to just 12 percent of college graduates who are currently paying off student’s debt.” The National Association of Realtors and American Student Assistance reported that 55 percent of people with student loans have put off buying a home and are not even considering homeownership.

Riverside Millenials are in for some good news! Homeownership does not have to be a pipe dream. Wondering why? Simply because you can buy a home even if you have a student loan burden. You don’t have to put off your dream of becoming a homeowner since Riverside homebuilders have convinced you that you can buy a home with as little as a 5% down payment. With all of the various home program loans, all you need is a professional realtor to guide you through the process. You’ve come to the right place! Allow The Power Is Now Media Inc. to be your top realtor from beginning to end. You are assured of achieving your homeownership goal with one of our best, Brianna Frazier, a VIP agent situated in Riverside, even if you have student loan debt.