A report found student debt reduces millennials’ savings for down payment, making it difficult for college-educated millennials to own homes in the Raleigh-Durham area.
The report, released last week by apartmentlist.com, found college-educated millennials with student debt need to save for an average of 10.2 years to pay a 20 percent down payment on a home, compared to around five years for those without.
But in Raleigh, college-educated millennials with student debt need to save for 15.2 years, while those without student debt need to save for only 5.4.
Here are some other highlights from the report:
- Millennials without a college degree in Raleigh need to save for 10.4 years.
- Nationally, 58 percent of college-educated millennials have monthly student loan payments, paying an average of $410.
- In Raleigh, 52 percent have student debt, with 33 percent paying at least $300 monthly.
- College graduates without student debt save $270 monthly for a down payment, compared to $110 for graduates with student debt.
- Millennials without a degree save $140 per month.
Although rising rent and student debt are hindrances for millennials wanting to own homes, the report suggests that delaying homeownership is partly by choice. The report said college graduates with debt have higher incomes than those without, but after higher taxes and student debt payments, their disposable income is about $1,100 lower. Despite these differences, both groups spend roughly the same amount on their expenses, suggesting college-graduate millennials with student debt are choosing to cut back on savings for homes despite being able to afford them.