Is Student Loan Debt Discouraging Homeownership among Young Adults?

Abstract

Amid concern that rising student loan debt has social and economic consequences for young adults, many suggest that student loan debt is leading young adults to forgo home buying. However, there is little empirical evidence on this topic. In this study, we use data from the National Longitudinal Survey of Youth 1997 to estimate associations of student loan debt with homeownership, mortgage amount, and home equity. We use a variety of methodological techniques and test several model specifications. While we find a negative association between debt and homeownership in some models, the association is substantively modest in size and is entirely driven by the debtor-nondebtor comparison; we find no association between debt amount and homeownership among debtors. Overall, we find limited evidence that student loan debt is responsible for declining young adult homeownership. Instead, indicators for the recession and transition to adulthood markers have a stronger association with homeownership.

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