Desire for homeownership remains high, student debt a barrier

This year we saw the national homeownership rate fall to its lowest level in five decades. In the second quarter of 2016, homeownership fell to 62.9% – a half-point decline over the previous year and previous quarter. Will the homeownership rate continue to decline? NeighborWorks America’s recent survey suggests a strong desire for homeownership – and some troubling barriers.

The report notes “aspirations of homeownership remain strong, with 89 percent of adults saying that homeownership is an important part of the American Dream, but an increasing percentage of consumers with student loan debt worry about their homeownership future, and a large percentage of consumers say that the mortgage process is complicated.”

NeighborWorks America’s survey asked questions that examined the relationship that student loan debt burdens are having on homeownership. The results?

  • 30 percent of adults knew someone who delayed the purchase of a home because of their student loan debt burden, compared to 28 percent in 2015, and 24 percent in 2014.
  • Of those with student loan debt, 53 percent said that the debt was “somewhat or very much” an obstacle to homeownership, a slight improvement from 57 percent in 2015, but still up from 49 percent in 2014.

screen-shot-2016-10-17-at-9-22-48-pmBut there’s a glimmer of hope in the numbers as well. A positive view of homeownership is more evident among minorities, the fastest growing segment of homebuyers. Specifically, in 2016, 14 percent of African-Americans and 12 percent of Hispanics said that homeownership is the most important part of their view of the “American Dream,” compared to 9 percent of whites. In 2015, 16 percent of African-Americans, 10 percent of Hispanics, and eight percent of whites said that homeownership was the most important part of the American Dream.

Overall affordability may perhaps be the most troubling sign for the housing market in the future. Only 45 percent of those surveyed believe that where they live is affordable to first-time homebuyers. Moreover, 56 percent of people believe that rent prices are too high for a person to save to buy a home in their area. This pessimism is especially strong among minorities who currently rent. Fifty-two percent of non-white renters strongly agree that rent prices where they live are too high to save for a future home.

By expanding homebuyer education, student loan debt management counseling, and down payment outreach initiatives, housing stakeholders can help people locate information that could clear up market confusion and expand the use of tools that improve access and affordability.

Atlanta Neighborhood Development Partnership is proud to be a Chartered Member of the NeighborWorks Network.  For more than 35 years, NeighborWorks America, a national, nonpartisan nonprofit, 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 $27.2 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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