Homeownership is on the decline and student loan debt is a factor, especially among Millennial renters. This generation, which generally reached adulthood around the year 2000, represents a major share of the rental market.
A report from CoreLogic found that 60 percent of rental housing applicants from 2011 and 2015 were Millennials. And 48 percent of Millennial rental applicants had student loan debts in 2015. The average student loan balance of Millennial rental applicants reached $31,900 in 2015, CoreLogic said.
CoreLogic data found that the average student loan balance reached $31,900 in 2015 for those aged 20-34. This marks a 41.8 percent increase compared with the average balance of $22,500 in 2008. Meanwhile, the median student loan balance for the same age group increased 53.7 percent to $18,600 in 2015 from $12,100 in 2008.
Writes Jianjun Xie for CoreLogic: “Considering the declining homeownership rate and the increasingly hot rental market, the growth of student loan debt is likely an important factor preventing millennials from saving for a down payment to buy a home and maintaining their rental status for a longer period of time.”
The aggregated outstanding student loan debt in the U.S. has more than tripled over the past decade, up from $380 billion in 2004 to $1.3 trillion in 2015. That’s the second-highest level of consumer debt, just behind mortgages.