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Student debt one of top reasons Millennials are not buying homes

Staff writer |
Twenty-somethings are not borrowing money to buy homes at the rate they were a decade ago and may have as much to do with high levels of student debt and poor job prospects.

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This is according to new research and analysis that Equifax Inc. is discussing at the National Association of Real Estate Editors (NAREE) conference in Miami.

In 2004, consumers under the age of 30 in the United States had $146 billion in student loan debt, a number that had more than doubled to $369 billion by 2014.

Equifax data shows a high correlation between income and student loan delinquency rates. Those earning less than $30,000 are at the highest risk for delinquency.

The delinquency rate is reduced by 20 percent with each additional $10,000 of income, a phenomenon that demonstrates the strain student debt puts on young consumers starting their careers.

While steady employment helps, Equifax data also indicate that young workers struggle to make timely payments on their student loans even as late as four years into a job, where older workers see improvement in payment performance.

While mortgage debt fell among twenty-somethings both with and without student debt, it fell at a faster clip among those with student loans, according to data from Equifax and the Federal Reserve Bank of New York. In 2006, 33.2 percent of consumers under 30 with student debt had mortgage debt.

By 2014, the number fell to 20.9 percent. In 2006, 29.6 percent of consumers without student debt had mortgage debt. By 2014, the number fell to 21.7 percent.

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