Despite low mortgage rates and a 25% price decline since 2006, home ownership has proven elusive for many Americans younger than age 40, and a recent article from Bloomberg suggests that student loan debt may be a factor. According to the article, the number of people in that age group who owned homes dropped by 4.6% from the third quarter to the fourth in 2012, the largest decrease since tracking of the statistic began in 1982. Overall, the fourth quarter homeownership rate was 65.4%, the lowest the rate has been since 1997.
Outstanding student loan debt has nearly doubled since 2007 and now stands at $1.1 trillion according to the article, with two-thirds of student loans held by people under age 40. The article also suggests that the mortgage crisis played a role in the debt increase, as many parents were unable to tap into home equity to pay for their children’s college costs, thus forcing students to take on more loans.
