It has been discussed recently that homeownership has been slowing down, particularly among millennials. While this has taken place, rental household formation has been increasing, with millennials making up a large share of this growing population. A new analysis from CoreLogic has revealed that 60 percent of rental housing applicants applying from 2011-2015 were millennials.
With this in mind, CoreLogic notes that student loan debt has become a growing burden nationwide, especially among millennials. The aggregated outstanding student loan debt in the U.S. has more than tripled over the past decade, increasing from $380 billion in 2004 to $1.3 trillion in 2015, according to CoreLogic. This is the second-highest level of consumer debt only behind mortgages.
The portion of millennial renters age 20-34 who had student loans has increased every year but one since 2008, according to CoreLogic. This is a reported 21 percent increase from 2008, when is stood at 38 percent, to 2015, when it stood at 48 percent. CoreLogic states that, not surprisingly, millennials have the highest percentage of student loan debt compared with older age groups. In considering the declining homeownership rate as well as the increasing rental market, CoreLogic says that the growth of student loan debt is likely an important factor preventing millennials from saving for a down payment to buy a home therefore attributing to their rental status continuing for a longer period of time.
For millennials applying for rental properties, CoreLogic data shows that the average student loan balance reached $31,900 in 2015 for age group 20-34. This is a 41.8 percent increase compared with the average balance of $22,500 in 2008. At the same time, the median student loan balance for the same age group increased 53.7 percent to $18,600 in 2015 from $12,100 in 2008.
Additionally, CoreLogic reports that The Joint Center for Housing Studies at Harvard University published the 2013 student loan balance of U.S. households. The average balance and median balance of renter households for age group 20-39 was $28,173 and $16,000, respectively. CoreLogic data shows the average student loan balance in 2013 for rent applicants in the same age group was $30,263 and the median balance was $16,400.