Home » Personal Finance » Americans Say Student Loans Are a Key Obstacle in Purchasing Homes, According to New Survey From NeighborWorks America

Americans Say Student Loans Are a Key Obstacle in Purchasing Homes, According to New Survey From NeighborWorks America

WASHINGTON, DC — (Marketwired) — 10/22/14 — Nearly one-out-of-four Americans knows someone who has delayed buying a home because of student loan debt, according to findings from the second annual America at Home survey commissioned by , a national nonprofit community development corporation based in Washington, DC.

While the shows 60 percent of adults say that owning a home is either the “most important” or a “very important” part of the “American Dream,” the burden of student loan debt and today–s overly tight lending environment appears to be working against many potential homebuyers.

Though it is not surprising those with student loans are wary of increasing debt levels by purchasing a home, it is important to note the powerful weight those with student loan debt express on their ability to be a potential buyer.

Additional key findings from the survey:

. When given a list of potential obstacles to home buying, “student loan debt” is the single largest obstacle among those who have debt (17 percent), over “lack of a down payment” (14 percent), the ability to “afford a preferred neighborhood” (13 percent) “lack of job security” (11 percent).

over the past five years. Furthermore, these participants are 10 percentage points less confident they can find “a mortgage that is right for them.”

When combined, African Americans and Hispanics make up approximately 20 percent of the population, but represent 29 percent of those with student loans.

. Women make up 58 percent of those with student loans. This may be a reflection of the rise of women in institutions of higher education (per the by 2012, women enrolled in college immediately after high school had increased to 71 percent).

“Earning a postsecondary degree is increasingly critical in the United States, but student debt is preventing some Americans from purchasing a home and fully fulfilling this –American Dream– aspiration,” said Chuck Wehrwein, acting CEO of NeighborWorks America. “If we don–t mitigate the effect student loan burden is having and will have for years to come on homeownership, the country will lose a significant amount of economic activity and hundreds of thousands of people will be unable to benefit from the stability and financial value that homeownership has been proven to offer.”

For those with student loans whose debt-to-income ratio pushes them outside the traditional mortgage approval box, NeighborWorks believes that lenders should consider the can make toward reducing risk for these borrowers. According to the survey, 25 percent of consumers with student debt say they would go to a housing counselor for information, compared to 13 percent of consumers without debt.

“The earnings potential for college graduates increases over time,” explained Wehrwein. “By prudently investing in these graduates and counseling those who aspire to homeownership, more Americans can put down stronger community roots and become a larger part of our economy.”

Widmeyer Communications, a Finn Partners Company, conducted the national representative survey among 1,000 U.S. adults using a random digit dial (RDD) sample. The survey has a margin of error of +/- 3.1 percentage points at a 95 percent confidence level.

For a copy of the full findings, please go to

NeighborWorks America has created opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. In the last five years, NeighborWorks organizations have generated more than $22.5 billion in reinvestment in these communities. NeighborWorks America is the nation–s leading trainer of community development and affordable housing professionals.

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Douglas Robinson

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Posted by on Oct 22 2014. Filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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