Key Highlights
- Nearly 30M people missed at least one student loan payment during Q2 2020, nearly triple the 11M that fell behind on mortgage or rent payment
- According to Mortgage Bankers Association Research Institute for Housing America, every additional $1K of student debt lowers homeownership rate by some 2%
- Corroborates research done by National Association of REALTORS®
In a recently released study from the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA), some 11M households missed at least one rent or mortgage payment while 30M people missed at least one student loan payment due to the impact of the COVID pandemic.
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Breaking down those millions, 11% or 5.88M renters missed, delayed or reduced a rental payment and 8% of 5.14M homeowners missed or deferred at least one mortgage payment. In contrast, nearly 50% of borrowers with student loan debt missed at least one student loan payment.
Let’s focus on the student loan borrowers. In total, according to the RIHA, 30.2M people missed at least one student loan payment since the beginning of the pandemic. This total is nearly three times the number of borrowers who missed at least one rent or mortgage payment since the pandemic outbreak.
Of those with student debt, 9% missed one payment, 16% missed two payments and 12% missed three payments. Broken down by race,
- 54.5% African Americans missed one or more student loan payments
- 49.7% LatinX
- 64.5% Asians
- 44% Caucasians
This RIHA research is corroborated by research done by the National Association of REALTORS® (NAR) on the subject of how student loan debt impacted homeownership. NAR found that more than seven in ten student loan borrowers, 76%, believe that student loan debt has impacted their ability to purchase a home. 78% of older Millennials believe that student loan debt has impacted their ability to purchase a home and 66% of younger Millennials believe that even their ability to rent or change their living situation has been impacted by their student debt.
Of course, the amount of student debt plays a part here among student loan borrowers. Take a look
- 69% with $25,000 or less in student debt
- 80% with $25K-$49.9K in student debt
- 80% with $50K-$75.9K in student debt
- 75% with $75K and above
Two last things: one…a good 63% of student loan borrowers would purchase a home if they did not have student loan debt and two… every additional $1,000 in student loan debt reduces the probability of home ownership by 2%.
Thanks to the Mortgage Bankers Association Research Institute for Housing America and the National Association of REALTORS®.
Also read: What’s Fueling the Rise of Co-Living Investment?, Rise in Jobless Claims Signals On-going Layoffs, Median Home Prices Up in 96% of Metros in Q2 2020
