NeighborWorks America is a national nonprofit that works tirelessly to provide safe and affordable housing access to future homeowners and renters. Through their good deeds and the research they require, they also collect a lot of meaningful data on housing
That data has been compiled into their fourth annual housing survey, which offers a telling look at how ballooning student loan debt and ever rising rent prices are severely hampering the outlook for homeownership in America.
The national survey, conducted by telephone, discovered that over 30 percent of U.S. residents know someone who can’t purchase a home due to student loan debt. That number is up from 28 percent last year and up over six points from 24 percent in 2014.
For potential home buyers with their own student loan debt, 53 percent said that paying off those debts was “somewhat or very much an obstacle” to them purchasing a home. That number is actually down a little from 57 percent in 2015, but higher than the 49 percent of those surveyed in 2014.
The respondents were even less optimistic when asked about the state of rental pricing. Over half, 56 percent, of those surveyed answered that they aren’t able to save enough towards purchasing a home due to the extremely high rental market.
“With the homeownership rate at the lowest point in decades, and minority homeownership plunging even further, these data signal a weak home buying market going forward, despite near record-low mortgage rates and broad-based national income growth,” said Paul Weech, president and CEO of NeighborWorks America.
The current state of the real estate market is also affecting student loan holders who dream of buying a home. When asked about their next housing choice, those with student loan debt were almost two times less likely to say they would be purchasing a home. Nearly 30 percent of those with student debt said they will only be looking to rent, while only 17 percent of people without student loan debt said they would continue to rent with their next move.
One thing that the survey made clear is that lagging homeownership numbers are not due to lack of want. Almost 60 percent of all renters surveyed, regardless of student loan debt, answered that they wished their next move would be from renter to homeowner.
When asked about housing affordability specifically in their own neighborhoods those surveyed were pretty much split down the middle. Forty-five percent agreed that homes in their local market are not affordable for first time homebuyers, while 50 percent thought they were affordable enough. That split wasn’t seen when asked about rental costs. Over half, 56 percent, of people agreed that local rents are so high as to prevent saving for a future home, while only 37 percent disagreed.
NeighborWorks America’s survey also revealed that many qualifying potential homeowners aren’t aware of national and local assistance programs meant to increase home ownership rates. The survey found that almost three-quarters of all Americans, 72 percent, aren’t even aware that down payment assistance is available and open to middle class homebuyers. That’s significantly worse than 2015’s findings, when only 67 percent weren’t aware. The numbers are even worse when it comes to the awareness for student loan debt counseling, which 77 percent of those surveyed who had student debt said they’d never heard of.
These findings have inspired NeighborWorks America’s to launch several training programs that aim to help housing counselors educate consumers on down payment assistance programs and student loan help. Those with high student loans are often the target of predatory lenders when much safer consolidation measures exist. There is also much room for education when it comes to how student loan payments and debts affect mortgage qualification.
With the Holiday season fast approaching, some of you may be looking for charities to support. NeighborWorks America is doing excellent and important work in the real estate field, striving to increase homeownership for all across the United States. After all, safe and affordable housings should be a right in our great country, not just a privilege.
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