Homeownership has been falling over the last few years in much of the United States, but the decline among younger adults has been particularly striking. The homeownership rate in the 25 to 34 age group fell by nearly 8 percentage points from 2004 to 2013 according to a recent report from Harvard University’s Joint Center for Housing Studies. As pointed out by writer Lisa Prevost, over the same period, student debt surged by more than 400 percent to top $1 trillion, a run-up that dwarfs the surge in mortgage debt during the housing bubble. The connection between student debt and declining homeownership appears unassailable based on these data.
But not everyone is convinced. Beth Akers, a fellow at the Brookings Institution, concludes that there is not necessarily a causal relationship and that research indicating that there is one could be misleading. Her research indicates that while the level of education debt has risen among young households, the monthly burden of student loan repayment has not increased significantly over the past two decades, in part because of longer repayment terms. Moreover, extremely high burdens remain rare. In 2010, about 75 percent of households with people ages 20 to 40 had education debt of $20,000 or less.