Student loans are a heavy burden on young adults, and some may find it hard to buy a home with that weight hanging over them. A report from Lendedu attempted to ease this burden with a ranking of U.S. cities where student loan repayment is easiest.
The New York Fed noted that student loan debt has begun to level off, though still remain at a high level. Payment progress is particularly slow for those who borrowed more. Despite the debt, The New York Fed still found that those with higher degrees are still more likely to become homeowners than those without. The gap grows even more with age.
These new homeowners may find it easiest to buy a home in Mount Sterling, Illinois, which sits at the top of Lendedu’s list of almost 500 cities in the U.S. where paying off student loans is easiest. Factors included median income wage, number of student loan accounts, number of delinquent accounts, number of defaulted student loan accounts, and the average monthly student loan payment total of the student loan accounts within each city. Another city in Illinois, Milan, sits at the top of Lendedu’s list of cities that have the hardest time with student loan repayment.
In addition to cost of housing, other actors such as local tax rates, general cost of living, and access to well-paying jobs play a role in determining how quickly a former student may be able to pay off their student loans.
Though many of these millennial homebuyers may be renting while they are in college, the better option may be homebuying. Many first-time homebuyers, particularly millennials, have found that owning a home has a more positive impact on their finances than renting, according to a report form Bank of America.