But student debt is one compelling reason that many millennials have stopped buying homes. Those who graduate with debt are less likely to own a home by age 33 than those who get away debt-free, the New York Fed data show. And thirty-somethings with more than $25,000 in debt fare worse than people with smaller bills.
Adrienne Naylor turned 34 this month. She has a stable job at a university in Cambridge, Mass., where she lives. She has a girlfriend she loves. But she does not feel like she is getting any closer to buying a home.
Ms. Naylor remembers her guidance counselors in high school going on about how much she would make if she went to college (a lot) versus what she would earn if she didn’t (much less). So she borrowed. And then changed colleges. And borrowed some more. Then she got a master’s degree in history, with a focus on managing archives and records. Now she has close to $300,000 in debt.
Eventually she fell behind on her payments and went into default, wrecking her credit score. No one wanted to hire her as an archivist, the focus of her graduate education. Before she got the university job, she made money however she could. She painted herself white and stood like a statue on a crate in Harvard Square, waiting for people to give her change. She worked the box office at a local theater. She collected garbage in Northampton for a stretch.
She now lives in a three-bedroom with two college students who sometimes have trouble remembering to replace the toilet paper.
“I would love to have a place that was just mine, but I don’t let myself want that too much,” she said. The university where she works recently offered employees a free seminar on home buying. A representative from Coldwell Banker rattled off the average price of a single-family home in the area ($2.7 million) and a condo ($800,000).
“I’m just like, ‘Oh my God, is this guy for real?’” said Ms. Naylor, who pays $550 a month for her room. “It really brought home how incredibly out of reach this is for me.”
Ms. Naylor’s girlfriend is a preschool teacher — “she’s going to be poor forever”— who lives nearby, with her own roommates. The couple would like to live together eventually. “I do have fantasies about buying a duplex that my girlfriend and I can live in and only see each other when we want to,” she said.
Surveys that ask people about their student loans are hard to trust, as many people do not seem to know how much debt they have, research shows, let alone how interest works. But they reveal one thing: College loans have made mortgages a pipe dream.
More than 80 percent of millennials surveyed by the National Association of Realtors and the nonprofit group American Student Assistance said that student debt had forced them to shelve their plans to buy a home. And people who did not own homes estimated that the debt had forced them to put off buying by seven years.