Home ownership is a dream that most millennials want to achieve. In fact, studies have shown that 89 percent of millennial renters want to eventually buy a house. However, student loan debt is a barrier that is keeping them from doing that.
Less than half of millennials have saved up money for a down payment. The study authors acknowledged that student loan debt is making it difficult for people to buy a home. They found that 23 percent of people who graduate from college without any debt are able to save up enough money for a down payment within five years. However, only 12 percent of millennials can reach their goal within five years if they have student loan debt.
Not having a college degree also makes it difficult for millennials to get a home. Only 6 percent of millennials who do not have a college degree can save up enough money to buy a home within five years. The average person owes $34,000 in student loans. Additionally, people are making higher monthly payments on student loans.
In 2005, the average monthly student loan payment is $227. In 2016, the average monthly payment was $393. That is why people are having a harder time coming up with the 20 percent down payment that they need to buy a home.
There are some things that millennials are doing to make it possible for them to buy a home. Nearly 20 percent of them are getting help from their family members. However, the amount of assistance that people can get will depend on their income.
Millennials who make over $100,000 per year expect to get $50,000 in assistance from their families. Those who make between $50,000 to $75,000 expect to receive $25,000 in assistance from family members. People who make less than $25,000 per year expect to receive $5,000 in assistance from family members.