Fed Says Student Loan Debt Is Preventing Young People From Buying Homes

Student loan debt is preventing young people from buying homes, according to new data put out by the Federal Reserve. Fed economists found that student loan debt prevented 400,000 people ages 24 to 32 from buying homes between 2005 and 2014, leading to a whopping 9 percentage-point drop in homeownership within that age group. “In surveys, young adults commonly report that their student loan debts are preventing them from buying a home,” Fed researchers Alvaro Mezza, Daniel Ringo, and Kamila Sommer said in a paper released Wednesday. “Our estimates suggest that increases in student loan debt are an important factor in explaining their lowered homeownership rates, but not the central cause of the decline.” According to the paper, each increase of $1,000 in debt led to a 1- to 2-percentage-point decline in home ownership, CNBC reports. Home ownership among all Americans for the study period declined 4 percentage points, from 69 percent in 2005 to 65 percent in 2014.