Nearly 80% of millennial student loan borrowers believe they would buy a home sooner with the proposed plan for student loan forgiveness, according to research conducted by Rocket Mortgage. The survey of 2,065 adults between the ages of 26 and 41 who currently have student loans or have had them in the past indicated that the majority of millennials looking to purchase their first home have an accelerated timeline with student loan forgiveness. Approximately 70% of millennial borrowers who intended to buy their first home in four to nine years said they believe they could buy in one to three years with student loan forgiveness, according to Rocket Mortgage.
Rocket Mortgage’s survey was conducted in April, prior to the formal announcement of the student loan forgiveness plan by President Joe Biden. As part of the plan, the Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans and up to $10,000 in debt for non-Pell Grant recipients earning individual incomes of less than $125,000 per year. At the time the plan was announced, federal student loans totaled $1.6 trillion across more than 45 million borrowers.
According to the Rocket Mortgage survey, 39.4% of millennial respondents who took out student loans have never had the opportunity to own a home, in most cases not because of a lack of interest. Of millennial borrowers who currently rent or live with family or friends, 77% said they still have student loans to repay. Of this cohort, 96.2% of respondents reported wanting to own a home someday, with 35.7% actively saving for a home purchase and an additional 45.1% planning to start saving in the future.
Approximately 50% of survey respondents reported paying $199 or less on student loans each month. Millennials with a gross income between $75,001 and $105,000 per year said making loan payments was “easy,” while those earning between $45,001 and $75,000 said it was “difficult,” according to Rocket Mortgage.
Of millennial borrowers currently saving or planning to save for a home, Rocket Mortgage said the median reported home budget was between $200,00 and $399,999, with a median time frame to buy of one to three years. The budget of millennial borrowers was unaffected by the potential of student loan forgiveness, with many respondents reporting an aversion to debt related to purchasing a home.
