Student debt is also keeping 4 in 10 graduates from moving out of a family member's house. The survey of 3,000 people conducted in April covered only those who are making on-time payments on their student loans.
The largest share of those postponing homeownership was among older millennials, aged 26 to 35, and among those carrying the most debt, about $70,000 to $100,000. Still, no matter what the amount of debt, more than half of non-homeowners in each generation report that it is postponing their ability to buy a home. Nearly half of younger millennials polled currently live with family, some paying rent, some not.
College graduates overall are more likely to have stable employment and more likely to earn enough to buy a home; student loan debt, however, is clearly outweighing the benefits of a college degree. Interest rates on student loan debt can be considerably higher than mortgage interest rates.
"A majority of non-homeowners in the survey earning over $50,000 a year — which is above the median U.S. qualifying income needed to buy a single-family home — reported that student debt is hurting their ability to save for a down payment," said Lawrence Yun, the Realtors' chief economist. "Along with rent, a car payment and other large monthly expenses that can squeeze a household's budget, paying a few hundred dollars every month on a student loan equates to thousands of dollars over several years that could otherwise go towards saving for a home purchase."
Eighty percent of the millennials surveyed said student debt was hampering their ability to save for a down payment. There are low down payment options for first-time buyers, like government-insured FHA loans at 3.5 percent down or Wells Fargo's latest offering at 3 percent down, but these loans have strict limits on the amount of debt the borrower can carry in relation to income. Student loan debt is a major factor in that.