Student Loans Hurt Ability to Save for a Down Payment
NAR: 47% of home buyers said student loan debt was the biggest obstacle to down payment savings; 43% said high rent or mortgages; 36% cited credit card debt.
WASHINGTON – According to the National Association of Realtors’ (NAR) 2020 Profile of Home Buyers and Sellers, 47% of potential home buyers said student loan debt was the biggest obstacle they faced in saving for a down payment on a home.
An additional 43% cited high rent/mortgages, and 36% cited credit card debt as barriers to buying a home.
This year, the number of first-time home buyers dropped to 31% from 33% last year, the lowest since 1987 when it was 30%.
The median down payment for all home buyers this year was 12%, with 7% for first-timers and 16% for repeat buyers.
Among first-time buyers, 26% said they used family for help for the down payment through a gift or loan, down from 33% last year.
Of those who purchased after March, 15% said they were more likely to purchase a multigenerational home compared to 11% who purchased before. These buyers were also more likely to purchase more expensive homes after March, at $339,400 compared to $270,000 before.
The NAR survey found that 57% who purchased their home after March were more likely to purchase in the suburbs, compared to 50% of pre-pandemic suburb buyers.
In addition, 5% of buyers after March purchased their homes without physically seeing it, compared to 3% who purchased before then. Ninety-seven percent of buyers searched for a home online, the highest percentage recorded and up from 93% last year.
Source: HousingWire (11/12/20) Falcon, Julia
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