Real Estate News

Student loans vs. mortgages: The millennial homebuyer dilemma

Published: 24 Feb 2017

The younger generation ready to buy homes may face challenges from other sources of debt weighing down on them. Make Lemonade recently reported on the average student loan debt, which can demand refinancing to stay manageable when a new purchase, such as a home, is on the horizon.

According to this source specifically, the average college student who graduated last year has a student loan debt of $37,172. That could already cause problems for anyone looking to make a home purchase, but some think the weight of student loans will have impact even beyond borrowers.

CNN Money reported on the view that some have of the student loan situation on a national level. According to this article, former FDIC Chair Sheila Bair is one of the most prominent voices behind the need for possible solutions for debt, such as income share agreements to lessen the financial burden.

Those millennials who have already completed their student loan payments could be another factor, and in a better position to purchase. Leading Real Estate Companies of the World Chief Economist Marci Rossell recently told Luxury Daily that the real estate market is set to see greater strength in 2017.

"Millennials are just now hitting their 30s, when we can expect them to be fully engaged in their careers, getting their first bonuses and nearing the end of their student loan payments, and with that comes the first round of millennial home buying, which will become an escalating trend over the next decade," Rossell explained.

ATTOM Data Solutions recently said that many real estate markets in the U.S. actually offer more affordable monthly home payments than renting a home with three bedrooms. Out of 540 counties throughout the country, 66 percent of these had less expensive payment prices than rental rates.