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Is Student Loan Debt Driving Homeownership Lower?
Monday, February 4, 2019
It's widely known that homeownership rates
are historically low and that they peaked at 69 percent in 2005. They began dropping a year or two later and had
lost about 4 percentage points by 2014. They did not stabilize until 2016. The 2005-2014 drop was most dramatic among young
adults. Three analysts from the Federal
Reserve Board's Division of Research and Statistics have now drawn a direct
line between their 9-percentage point decline in homeownership and student loan
debt. The three, Alvaro Mezza, Daniel Ringo, and
Kamila Sommer, looked specifically at household heads aged 24 to 32. Among
those in this category in 2005, 45 percent owned their home, but just 36
percent did in 2014. Over that same time frame, per capita student debt levels went
from $5,000 in 2005 to $10,000 in 2014 and the total has reached $1.5 trillion.
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