According to a report released this year by the National Association of Realtors (NAR) and American Student Assistance, crushing student debt is further driving down homeownership in cities such as Los Angeles that are already facing high costs and low inventory. The report shows that the typical student debt load is around $41,000, which is several thousand dollars more than the annual median income of the respondents. The Census Bureau reports that Los Angeles has the third-lowest homeownership rate, 50.1 percent, of the country’s top metropolitan cities. Jessica Lautz, who directs survey research at NAR, states,
As you have fewer homes on the market, prices are just going to rise steeply and more out-of reach for these consumers.
The San Jose and New York metros have lower shares of homeowners than any other metropolitan cities in the United States, according to the Census Bureau. A survey conducted this year by the California Association of Realtors among 2,200 millennials also found that student debt is preventing millennials from saving for retirement, changing jobs, marrying and having children. A quarter of those surveyed stated that student debt prevented them from even exploring homeownership. It’s sad to hear that millennials are in so much debt that they are essentially discouraged from buying a home, but hopefully something can be done to change these issues.