|Millennials and Student Debt: We Knew They Were Wrong!
Posted: 30 Jun 2014 04:00 AM PDT
For almost a year now, we have been trying to debunk the myth that student debt is keeping the vast majority of Millennials from purchasing a home.
We explained that Millennials have purchased more homes over a recent twelve month period than any other generation as was reported by the National Association of Realtors).
We explained that the homeownership rate of people currently between the ages of 25-29 is 34.3%. That is higher than the 33.6% rate members of the previous generation (people currently between the ages of 45-49) achieved when they were that age (as per John Burns Consulting).
We explained that a recent survey showed that almost three out of every four (74%) young adults between the ages of 18-34 plan to buy a home in the next five years with 32% planning to do it in the next twelve months.
However, no matter how hard we tried, the same recourse was trumpeted back at us – What about student debt?
The good news is that the real facts about student debt are coming to light. Last week, The New York Times posted an article titled The Reality of Student Debt Is Different from the Clichés. This article went into great depth regarding the findings of a new study just released by the Brookings Institution, Is a Student Loan Crisis on the Horizon? which looked at data through 2010. The NYT article quoted key elements of the report:
The authors of the actual study put it simply in their conclusion:
“Despite the widely held belief that circumstances for borrowers with student loan debt are growing worse over time, our findings reveal no evidence in support of this narrative. In fact, the average growth in lifetime income among households with student loan debt easily exceeds the average growth in debt, suggesting that, all else equal, households with debt today are in a better financial position than households with debt were two decades ago. Furthermore, the incidence of burdensome monthly payments does not appear to have become more widespread over the last two decades.”
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