Individuals between the ages of 24 and 32 owe roughly $1.5 trillion in student loan debt. This is one of the reasons why young people in Delaware and throughout the country are not buying homes, according to a Federal Reserve study. However, home ownership has been down among all Americans between 2005 and 2014.
In 2005, 69 percent of Americans owned homes. In 2014, only 65 percent did. For those between ages 24 and 32, home ownership rates dropped from 45 percent to 36 percent. According to the report, the average per capita student loan debt increased from $5,000 to $10,000 during the period analyzed by researchers. Much of the increase happened after the start of the Great Recession. This was a period of high unemployment during which there was a greater demand for a college education.
Researchers also said that this increase resulted in about 400,000 people not buying homes who otherwise would have been expected to do so. One of the takeaways from the report was that while there are positives to earning a college degree, not being able to afford a home could offset some of the benefits of doing so. Since the turn of the 21st century, the cost of an education at a private school has increased 56 percent.
While student loan debt could make it difficult to buy a home, it isn’t impossible to do so. Individuals who meet credit score and debt-to-income ratio requirements may be able to purchase a residential property regardless of their existing debt. A lender may be able to help a prospective buyer learn more about his or her mortgage options. In addition, an attorney could review a purchase offer to ensure that its terms adhere to state law and are as favorable as possible.