Student loan debt impacting Americans’ dream of homeownership

While home ownership is still an aspiration for the majority of Americans, some are struggling to achieve this goal due to student loan debt.

NeighborWorks recently conducted their third annual housing survey and found that student loan debt continues to be an issue for potential homebuyers. Of those surveyed, 28 percent of adults knew someone who had delayed the purchase of a home because of their student loan debt, an increase of 4 percent from last year. Of the respondents who have student loan debt, 57 percent reported that the debt was “somewhat or very much,” an obstacle to home ownership, up 8 percent compared to 49 percent last year.

Nineteen percent of respondents said their view of home ownership has changed for the worse since the housing crisis, however that is a 1 percent decrease since last year. However, only 11 percent of people without student loan debt said that their view of home ownership has worsened since the housing crisis, down 2 percent in 2014.

Another concern of potential homeowners is the mortgage process. Nearly 70 percent of respondents deem it as “complicated.” NeighborWorks pointed out that even though mortgage rates are “historically low,” consumers are still not motivated. For those concerned with their student debt, 76 percent of them say that the home buying process is confusing to them. That is a 6 percent increase from last year.

However, home ownership is still a goal that consumers strive for as part of the “American Dream.” Of those surveyed, 87 percent said that home ownership is an important part of the American dream.

The survey found that minorities are the fastest-growing market of homebuyers, and the most excited about it. Of those surveyed, 16 percent of African-Americans and 10 percent of Hispanics said that home ownership is the most important part of their view of the “American Dream.” Eight percent of Caucasians surveyed said home ownership was most important to their version of the “American Dream.” Numbers have dropped slightly since last year, when 26 percent of African Americans, 18 percent of Hispanics and 8 percent of whites said home ownership was the most important.

NeighborWorks conducted this survey via telephone.