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June 26, 2016

Where is Student Loan Debt the Worst?

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Where is Student Loan Debt the Worst?

First-time buyers are called the 'missing link' in real estate's recovery. Research shows that the majority of millennials strive for home ownership, but various factors keep them from buying right now. One big cause for concern is the burden of student loan debt.

Read more: The Real Reason Millennials Aren't Buying

NAR Research recently took a look at the impact that student loan debt is having on young buyers, and what region of the U.S. is seeing the highest amount of student loan debt. They found that in 2015, 25 percent of first-time buyers under the age of 34 said saving for a down payment on a home was the hardest step in the process. 58 percent of this group mentioned that student loan debt kept them from buying a home.

Certain regions are faring better than others. The South Atlantic states, Delaware, Maryland, Washington, D.C., West Virginia, Virginia, North Carolina, South Carolina, Georgia, and Florida, had the lowest median student debt at $15,000. On the other hand, the East South Central region, which includes Kentucky, Tennessee, Mississippi, and Alabama, had a median student loan debt of $70,000.

According to NAR Research, this contrast "warrants further research into how the number of jobs and salaries on the market affect student loan debt thus delaying younger buyers from purchasing a home for three to five years."

Source: "Student Loan Debt Hampering Home Buying: A Regional Perspective," NAR Economists' Outlook Blog (Jan. 5, 2016)