Illinois millennials say student loans are the biggest financial factor preventing them from buying a home, Country Financial survey finds

Vikas Gandhi and his wife recently started considering buying a house, but they were put on the brakes when a loan officer told them how much their combined student loan debt of $125,000 would hold back what they could borrow for a loan mortgage.

“We’re going to have to keep renting until we’re in a better financial position to buy,” said Gandhi, 29, who works in health care administration. He asked that his wife, who is 30 and works in the same industry, not be identified.

The couple, who have three degrees between them, weren’t entirely surprised by the news. “It’s the norm among people our age,” Gandhi said. “You don’t even think about buying a house because of your student loans.”

In Illinois, 67% of college-educated renters aged 34 or younger said student loan debt was the biggest financial factor preventing them from entering the housing market, according to published survey results. yesterday by Bloomington-based Country Financial.

Student loan debt “is like an anchor weighing them down,” said Joe Buhrmann, the country’s financial planning support manager. Add to student loans the credit card debt that many students accumulate while in college, he said, and “they carry a burden” that prevents them from taking out a mortgage.

The country’s survey was national: Nationwide, 46% of millennials said saving for a down payment is the biggest barrier to buying a home. In Illinois, 32% of millennials said a down payment is the biggest barrier.

Austin Bourdages, a 29-year-old who works in the financial industry in Chicago, said the small down payments don’t quite offset the two high costs inherent in buying in Chicago: high property taxes and monthly the homeowners’ association that helps buy a condo, a type of housing that’s perhaps more common here than in some big cities.

“These costs make you put off the purchase,” said Bourdages, whose student loan debt is about $60,000.

In January, the Federal Reserve reported that the homeownership rate among people in their 20s and early 30s had fallen nearly 9 percentage points between 2005 and 2014, more than double the decline homeownership at all ages. Average student debt in Illinois was over $29,000 in 2017, up 63% since 2006, according to the Institute for College Access and Success.

“They’re living with more and more debt,” Buhrmann said, “and postponing that first home purchase,” which is helping to weaken demand “for all those homes putting up for sale signs in their yard this spring.” .