Student loan debt and high rent prices continue to worsen the homeownership outlook according to data from the fourth annual housing survey from NeighborWorks America.
The national telephone survey found nearly one-third (30 percent) of Americans know someone who has delayed the purchase of a home because of student loan debt, up from 28 percent in 2015 and just 24 percent in 2014.
More than half (53 percent) of potential homebuyers with student loan debt said the debt was somewhat or very much an obstacle to buying a home, down slightly from 57 percent in 2015, but above the 49 percent rate in 2014.
Meanwhile, 56 percent of people said rents are too high where they live to save enough to purchase a home. Rising home prices and rents are especially affecting student loan holders who want to be homeowners.
Asked about their next housing choice given current market conditions, 29 percent of people with student debt said they expect to rent again, while only 17 percent of people without student debt said their next move would be to rent.
Nearly 60 percent of renters wish their next housing move would be into homeownership.
Housing affordability weighs on homeownership
Americans are split on housing affordability in their own neighborhoods. Forty-five percent of those polled agree that homes in their market are unaffordable to first-time homebuyers, while 50 percent say that homes are affordable.
But while there is nearly an even split about affordability, rental costs clearly are an obstacle to homeownership.
Fifty-six percent of people agree that rents in their area are too high for a person to save for a future home, and just 37 percent disagree. Better awareness of downpayment assistance programs and student loan debt counseling could help affordability.
For example, the survey found that 71 percent of Americans are not aware of or unsure about the downpayment assistance open to middle-class homebuyers, up slightly from 67 percent in 2015.
In addition, 77 percent of those with student debt never heard or are not familiar with loan counseling programs from nonprofits
These programs could help a consumer manage student debt and provide information about downpayment assistance programs that could increase the possibility of qualifying and obtaining affordable and sustainable homeownership.
*Taken from the California Association of Realtors®
— Alec Bruice is a licensed real estate broker with Santa Barbara Brokers and the 2016 president of the Santa Barbara Association of Realtors. Contact him at alec@goodland-realty.com or 805.637.5774. The opinions expressed are his own.