SANTA CLARA, Calif.,
Oct. 15, 2019 /PRNewswire/ --
Realtor.com®, The Home of Home Search™, today
released new data that found total student debt could buy every
U.S. house on the market 1.9 times over. With the rising costs of
education, students are borrowing more and more money, which has
led to delayed homeownership as the average student loan borrower
owes $34,500 -- $8,500 more than the typical down payment off
$26,000.
"Student debt has ballooned to an all-time high as the price of
education continues to outpace wage growth, and this is holding
back many potential buyers from being able to purchase a home,"
according to realtor.com®'s Senior Economist,
George Ratiu. "Student debt is
already impacting borrowers' ability to buy a home and education
debt is expected to hamper consumers' financial decisions for many
years down the road."
Students are taking on more debt to cover their expenses than
ever before, according to the Department of Education. This is in
part due to the fact that wage growth has been stagnant in
comparison to the rapid growth in cost of higher education. The
typical tuition at a public university has grown at four times the
rate of the average wage since 1986, and private university tuition
has grown at seven times the rate of the average wage over the same
time.
Nationally, the median sale price of a U.S. home is $260,000, according to realtor.com®.
With a typical down payment of 10 percent that would come out to
$26,000, which is $8,500 less than the average student debt of
$34,500. Additionally, the total
value of U.S. homes on the market is $780
billion. That is 1.9 times less than the total outstanding
student debt of $1.5 trillion
shouldered by 42.8 million borrowers.
At 15.1 million strong, millennials make up 34 percent of all
student borrowers. The generation's total debt has accumulated to
$498 billion -- over half the value
of all U.S. homes for sale. Millennials have an average balance of
$33,000 per borrower, which is
$7,000 more than the typical down
payment on the median U.S. home. In comparison, the median down
payment for millennials is $11,400,
according to realtor.com.
"The important implication of rising debt is that young
generations are delaying major life decisions," added Ratiu. On the
real estate front, the affordability crisis in major cities is
driving young families to more affordable Midwestern and Southern
markets, where savings for a down payment stretch much further and
can turn owning a home from a future dream into today's
reality."
According to a recent NAR report, 26 percent of millennials cite
student loans as the primary barrier to saving up for a down
payment. Additionally, 61 percent of those millennials say their
student loans have delayed their home purchase.
On a state level, the state with the greatest outstanding loan
balance is California, with
$116 billion in student debt.
Meanwhile, Washington, D.C. has
the largest average balance per borrower at $52,581.
Ohio has the most affordable
down payment, compared with educational debt load, where the
average down payment on a median priced home in Ohio is 53 percent of the average student loan
balance. Ohio is followed by
Alabama, Michigan, Arkansas, and Oklahoma. In the short term, a high down
payment to student debt ratio will delay many buyers' ability to
enter the market, while reducing access to available inventory.
National Breakdown
- Down Payment vs Debt
|
|
Total
Outstanding
Balance
|
Total
Number of
Borrowers
|
Avg Debt Per
Borrower
|
Median Home
Sale Price (July
2019)
|
10% Down
Payment
|
Down
Payment vs
Debt
|
1.48
trillion
|
42.8
million
|
$34,500
|
$260,000
|
$26,000
|
75.4%
|
|
|
State Breakdown -
Down Payment vs Debt
|
|
Location
|
Balance (in
billions)
|
Borrowers
(in
thousands)
|
Avg Debt
Per
Borrower
|
Median Home
Sale Price (July
2019)
|
10% Down
Payment
|
Down
Payment vs
Debt
|
Ohio
|
$50.50
|
1,618
|
$31,217
|
$164,900
|
$16,500
|
52.9%
|
Alabama
|
$18.20
|
548
|
$33,218
|
$182,000
|
$17,818
|
53.6%
|
Arkansas
|
$9.80
|
331
|
$29,607
|
$181,000
|
$16,700
|
56.4%
|
Michigan
|
$42.10
|
1,290
|
$32,636
|
$170,000
|
$18,500
|
56.7%
|
Oklahoma
|
$11.70
|
405
|
$28,889
|
$169,500
|
$16,500
|
57.1%
|
Iowa
|
$11.20
|
408
|
$27,458
|
$174,000
|
$15,750
|
57.4%
|
Missouri
|
$23.50
|
733
|
$32,064
|
$163,000
|
$18,738
|
58.4%
|
West
Virginia
|
$5.90
|
204
|
$28,922
|
$195,154
|
$17,180
|
59.4%
|
Kentucky
|
$15.50
|
527
|
$29,423
|
$231,000
|
$17,650
|
60.0%
|
Georgia
|
$52.90
|
1,422
|
$37,206
|
$205,000
|
$22,980
|
61.8%
|
Indiana
|
$23.90
|
815
|
$29,311
|
$185,972
|
$18,347
|
62.6%
|
Tennessee
|
$24.40
|
740
|
$32,973
|
$187,500
|
$21,000
|
63.7%
|
Pennsylvania
|
$52.30
|
1,610
|
$32,491
|
$215,000
|
$21,000
|
64.6%
|
South
Carolina
|
$21.30
|
628
|
$33,933
|
$226,000
|
$22,200
|
65.4%
|
Illinois
|
$50.70
|
1,466
|
$34,589
|
$222,000
|
$22,700
|
65.6%
|
Nebraska
|
$6.40
|
223
|
$28,725
|
$190,000
|
$19,000
|
66.1%
|
Louisiana
|
$16.60
|
540
|
$30,729
|
$205,000
|
$20,450
|
66.5%
|
North
Carolina
|
$38.00
|
1,128
|
$33,679
|
$222,450
|
$23,100
|
68.6%
|
Mississippi
|
$12.30
|
382
|
$32,207
|
$235,000
|
$22,501
|
69.9%
|
Wisconsin
|
$19.00
|
664
|
$28,614
|
$200,000
|
$20,000
|
69.9%
|
New
Mexico
|
$6.00
|
198
|
$30,349
|
$218,250
|
$21,908
|
72.2%
|
Florida
|
$75.90
|
2,197
|
$34,544
|
$205,000
|
$25,000
|
72.4%
|
South
Dakota
|
$2.90
|
102
|
$28,431
|
$250,000
|
$20,650
|
72.6%
|
Vermont
|
$2.30
|
69
|
$33,333
|
$243,750
|
$24,375
|
73.1%
|
Kansas
|
$10.10
|
346
|
$29,174
|
$230,000
|
$22,115
|
75.8%
|
Maine
|
$5.00
|
166
|
$30,102
|
$238,000
|
$24,250
|
80.6%
|
Minnesota
|
$21.90
|
724
|
$30,253
|
$243,100
|
$24,500
|
81.0%
|
Delaware
|
$3.60
|
109
|
$32,907
|
$245,025
|
$26,990
|
82.0%
|
Connecticut
|
$13.90
|
435
|
$31,969
|
$319,900
|
$26,500
|
82.9%
|
Texas
|
$89.50
|
2,992
|
$29,911
|
$272,000
|
$24,807
|
82.9%
|
Arizona
|
$24.10
|
749
|
$32,193
|
$215,000
|
$26,800
|
83.2%
|
North
Dakota
|
$2.00
|
77
|
$25,940
|
$265,000
|
$21,860
|
84.3%
|
Maryland
|
$28.90
|
741
|
$39,028
|
$268,998
|
$33,053
|
84.7%
|
Virginia
|
$34.10
|
959
|
$35,565
|
$305,000
|
$31,800
|
89.4%
|
New
Hampshire
|
$5.30
|
171
|
$30,940
|
$317,250
|
$28,000
|
90.5%
|
Idaho
|
$5.90
|
197
|
$29,919
|
$270,000
|
$27,313
|
91.3%
|
Wyoming
|
$1.30
|
47
|
$27,484
|
$285,000
|
$25,866
|
94.1%
|
Montana
|
$3.30
|
111
|
$29,837
|
$255,000
|
$28,755
|
96.4%
|
Alaska
|
$1.90
|
61
|
$31,148
|
$280,125
|
$30,049
|
96.5%
|
Rhode
Island
|
$3.70
|
126
|
$29,459
|
$279,900
|
$28,500
|
96.7%
|
New
York
|
$76.50
|
2,192
|
$34,895
|
$303,125
|
$34,500
|
98.9%
|
Nevada
|
$8.80
|
286
|
$30,812
|
$308,360
|
$31,000
|
100.6%
|
Oregon
|
$16.50
|
490
|
$33,646
|
$334,375
|
$35,000
|
104.0%
|
New
Jersey
|
$34.20
|
1,055
|
$32,432
|
$352,200
|
$34,500
|
106.4%
|
Utah
|
$7.90
|
269
|
$29,412
|
$336,250
|
$33,000
|
112.2%
|
District
of
Columbia
|
$5.50
|
105
|
$52,581
|
$385,000
|
$60,000
|
114.1%
|
Colorado
|
$22.90
|
686
|
$33,401
|
$625,783
|
$38,250
|
114.5%
|
Washington
|
$22.60
|
706
|
$32,016
|
$387,700
|
$38,500
|
120.3%
|
Massachusetts
|
$25.70
|
814
|
$31,584
|
$430,000
|
$42,200
|
133.6%
|
California
|
$116.00
|
3,429
|
$33,832
|
$515,000
|
$51,000
|
150.7%
|
Hawaii
|
$3.60
|
108
|
$33,395
|
$537,050
|
$57,500
|
172.2%
|
Methodology
Federal student loan debt data taken from U.S. Department of
Education, Q2 2019.
Home sale prices taken from realtor.com home sales database,
July 2019.
Total market value derived from realtor.com residential listings
database, September 2019.
Millennial median down payment is based on a realtor.com
analysis of a sample of residential mortgage loan originations from
Optimal Blue.
About realtor.com®
Realtor.com®, The Home of Home Search℠, offers the
most MLS-listed for-sale listings among national real estate
portals, and access to information, tools and professional
expertise that help people move confidently through every step of
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realtor.com® uses data science and machine learning to
connect consumers with a real estate professional based on their
specific buying and selling needs. Realtor.com®
pioneered the world of digital real estate 20 years ago, and today
is a trusted resource for home buyers, sellers and dreamers by
making all things home simple, efficient and enjoyable.
Realtor.com® is operated by News Corp [Nasdaq: NWS,
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license from the National Association of REALTORS®. For
more information, visit realtor.com®.
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content:http://www.prnewswire.com/news-releases/i-owe-u-student-debt-total-reaches-1-5-trillion-nearly-doubles-us-housing-market-300938473.html
SOURCE realtor.com