Student loan debt is holding back buyers, and according to the the sixth annual NeighborWorks America at Home survey, many who are weighed down by debt are worried about their college debt most or all of the time.
Student loan debt makes up 42 percent of all consumer debt, surpassing $1.5 trillion as of Q2 2018. Millennials are shouldering most of the ballooning student loan debt, which has risen 130 percent since 2008.
"It's important for people to have the tools and resources they need to be informed consumers from the moment they consider owning a home," says Karen Hoskins, acting VP of homeownership programs and lending at NeighborWorks America. "A housing counselor can guide them through what often seems a daunting, confusing process. They also will benefit by thinking about nonprofits as helpful sources of services and information. Down-payment assistance is especially helpful for homebuyers who struggle because of student loan debt."
According to NeighborWorks, 57 percent are burdened with student debt, and 59 percent say either they or someone they know has delayed purchasing a home due to student loan debt.
Additionally, around 73 percent of potential homebuyers are holding out on purchasing due to a perceived complexity of the homebuying process, despite historically low mortgage rates.
For those that feel that their student loan debt is holding them back from homeownership, education about what other options are available may be key. NeighborWorks also notes that 46 percent of millennials are not aware that local nonprofits offer student loan debt counseling for free or at a low cost, which may be the boost some need to gain homeownership. The report notes that by expanding homebuyer education, student loan debt counseling and marketing of down payment assistance, nonprofits can clear up confusion and increase use of tools that improve access to affordable options.
Find the NeighborWorks report here.