Education may be a double-edged sword to millennials saddled with student loan debt, but over the long term that education will help them fulfill their dreams of homeownership, according to about a dozen economists and housing analysts interviewed by Bloomberg.
Nearly 45 percent of 25-year-olds had student debt at the end of 2013, up from 25 percent in 2003, and their average loan balance was $20,926, the news outlet said. Meanwhile, 90 percent of renters under the age of 39 said in the fourth quarter that they want to buy a home eventually, according to a Fannie Mae survey.
Economists predict that millennials (often described as those born in 1980 or later) will boost their purchasing power in the next two to five years as the labor market improves and their investment in education starts to pay off.
“Given the Great Recession and the slow recovery, millennials have faced very difficult economic circumstances,” Richard Fry, a senior economist at the Pew Research Center in Washington, told Bloomberg.
“But they have a very significant tailwind. They are more educated than any generation before them. All of those college degrees will sooner or later pay dividends and they will buy homes.”