Are student loans impacting homeownership?

According to a new report, despite the widespread belief that student loans are causing people not to purchase a home, that isn’t the case.

However, having an education did have an impact on whether someone was a homeowner, according to the researchers. “What divides the haves and have-nots is not student debt. It’s having a college education,” stated The dividing line between haves and have-nots in home ownership: Education, not student debt.

Prior to the recession, more than one-third of young people who had a college education with no student debt owned a home, compared to 23 percent of those without a college education who were homeowners. During the recession, homeownership unsurprisingly dropped in both those with college degree and without. In 2010, 26 percent of those with a college education and no student loan debt were homeowners, compared to only 17 percent of those who did not have a college education.

The report also pointed that when people are in their early 20s, if they need not go to college, they are more likely to own a home because they have been working since high school, while those who did attend college are not entering the workforce until after they graduate.

However, that tends to not last long, as those who attended college have a higher rate of homeownership by the time they hit 27. Fast forward 8 years to 35 years old, and the college-educated are 14 percent ahead of those who did not attend college.

Students who attended college without loans are more likely to become homeowners sooner than those without the debt. However, by the time both groups reach their 30s, the homeownership rate is nearly identical. According to the report, the typical college graduate with a bachelor’s degree who has debt has an average of $30,000 and owes approximately $350 a month or $4,200. “This burden of student debt is dwarfed by the differences in earnings between those with and without a college education,” the report said.