Millennials’ Future Homeownership and the Role of Student Loan Debt

Abstract

The financial burden of student loans on individuals in the Millennial generation is a serious issue. We investigated the effect this financial burden has on not only current homeownership but also the expectations and timing for future homeownership. The data came from the 2016 UF/VT Millennial Housing and Student Debt Survey of 1,327 young adults aged 19 to 35. We used a logistic regression model to determine differences in current homeownership and a two‐stage Cragg model to examine the expectation and timing of future homeownership. We found that while student loans negatively affected Millennials’ current ownership rates, the Millennials still wanted to be homeowners. Moreover, the homeownership timeline for Millennials with student loan debt will be delayed by several years relative to their counterparts without student loan debt.

Private Rental Target Markets: A Comprehensive Spectrum

“…Similar research suggests that renting in desirable areas is preferred to homeownership elsewhere (Pawson, Hulse, and Morris, 2017). Furthermore, student debt has negatively impacted homeownership among millennials (Brown et al, 2015;Cho, Xu, and Kiss, 2015;Houle and Berger, 2015;Mountain et al, 2020;Shand, 2007). As the most educated generation, "millennials are either avoiding homeownership because they do not wish to take on additional debt, or they are unable to get approval for a mortgage due to their high debt loads and poor credit scores" (Xu et al, 2015, pp.…”

A Review of Best Papers in Personal Finance: 2008–2020

“…Mountain et al. (2020) collected data from Millennials using an online survey. With logistic regression and Cragg two‐part regression models, they found that student loans negatively affected the current ownership rates.…”

“…Mountain et al. (2020) surveyed Millennials on the effect of student loan debt and the timing of future homeownership.…”

“…Using OLS regression, they found that counties with higher loan approvals and positive interest rate spreads tended to have higher foreclosure rates. Mountain et al (2020) collected data from Millennials using an online survey. With logistic regression and Cragg two-part regression models, they found that student loans negatively affected the current ownership rates.…”

“…They wanted to understand the role of loan approval, denial decisions, and interest rates. Mountain et al (2020) surveyed Millennials on the effect of student loan debt and the timing of future homeownership.…”