Unfortunately, there haven’t been many updates on the Biden administration’s plan to widely forgive federal student loans — though he has taken specific actions for those who have been, say, defrauded by for-profit colleges. While borrowers wait to hear whether or not Biden will take significant action on student loans, one thing is clear: Many millennials want to see more student loans forgiven, according to a new poll.
Rocket Mortgage wanted to understand how forgiveness of student loans could impact millennials who want to buy homes. To find out more on the topic, the company surveyed 2,065 people who have student loans or had them in the past and are between the ages of 26 and 41.
The survey was conducted in April 2022, and although it found student loan debt won’t specifically prevent millennials from buying a home, the debt overall does play a key role in how the millennial generation enters the home market.
Here’s what the Rocket Mortgage poll found:
- 83.11% of millennial-aged borrowers want student loans forgiven
- $40,000 to $60,000 is the median amount millennials have borrowed in student loans
- 69.9% of millennial borrowers who hoped to buy their first home in four to nine years felt they should be able to purchase their home in one to three years if their student loans were forgiven
- 34.9% of millennials who had student loans didn’t have the opportunity to own a home
One of the more interesting finds Rocket Mortgage found through its poll is how much the COVID-19 pandemic set millennials’ home plans behind. Of the 1,252 millennial borrowers who own a home, 49.3% bought their home between 2014 and 2019, when the housing market was way different than it is now.
As Rocket Mortgage points out, “during this time, home buyers had access to a surplus of available housing, down payment assistance programs and lower interest rates, while low home prices and declining unemployment rates made many borrowers finally feel financially secure enough to purchase a home.”
Essentially, there was a short window of time in which millennials could afford a home, and that window has closed. When compared to millennials who bought a home between 2014 and 2019, far fewer millennials purchased their home from 2020 to 2022. In fact, there was a ten-point drop in sales to millennials during the pandemic hot market. As Rocket Mortgage points out, this drop is likely “due to a combination of the COVID-19 pandemic lending uncertainty as well as rising competition and home prices during this period.”
The poll also showed that for millennials who purchased their home between 2020 and 2022, during the full swing of the pandemic, student debt factored into home affordability. During this timeframe, student loan repayments were on pause, and 63% of home purchases were by millennials who had student loans.
That percentage is up from 59.2% between 2017 and 2019, “which could indicate the increase in millennial homeownership is due to the current pause on student loan payments,” Rocket Mortgage says.