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Millennials Anticipate Buying A New Home With Student Loan Forgiveness

March 29, 2023 5-minute read

Author: Katie Ziraldo


  • 39.4% of millennials who took out student loans have never had the opportunity to own a house.
  • 69.9% of the millennial borrowers who intended to buy their first home in 4 – 9 years said they believe they could buy in 1 – 3 years with student loan forgiveness.
  • The rate of homeownership is greater among millennial student loan borrowers compared to non-student loan borrowers.
  • Millennials borrowed a median amount of $40,000 – $60,000 in student loans.
  • 83.11% of millennial borrowers said they believe there should be some type of student loan forgiveness.

With limited houses on the market, heavy competition between buyers and expensive home prices, there’s no denying that home buying has gotten more challenging in the past 2 years.

But many millennials have been forced to delay home buying for other reasons like spending years of their lives saving and paying down debt – including student loans – to be more financially secure before taking the leap into homeownership.

In a new survey by Rocket Mortgage® of over 2,000 millennials age 26 – 41, 64.3% of millennial borrowers said they still owe money on their student loans. And although student loan debt won’t specifically prevent them from buying a house, debt overall plays a key role in both getting approved for a mortgage loan and the ability to save for a down payment.

So, how would student loan forgiveness potentially impact the buying power of the millennial generation?

How Do Millennials With Student Loans Perceive The Dream of Homeownership?

The American dream isn’t as cut and dried as it was once perceived to be, and the paths one might take to reach homeownership are even more varied. This may be why some millennials see student loan debt as a major roadblock to home buying, while others have already purchased their first house.

According to the latest data from the U.S Census Bureau, 48.6% of all millennials own a home. But when looking only at millennial borrowers, new survey data showed 56.8% currently own a home, and the majority of this group (55.9%) are still making payments on student loans.

This is a 7-point increase in homeownership among millennial borrowers when compared to the general population, which isn’t a new trend. The percentage of homeownership around the age of 30 has been greater among student loan borrowers over non-borrowers since around 2000, according to the Urban Institute. This could be because those with student loans also have a higher level of education and greater income potential. Diving into homeownership at different life stages, 43.9% of millennials ages 26-30 currently own a home, 59.2% ages 31-35 own a home, and 63.1% of millennials ages 36-41 own a home.

Millennial Home Ownership Rate By Age Group

Of the 1,252 surveyed millennial borrowers who own a home, 49.3% said they made the purchase between 2014 –2019, when long-term recovery from the Great Recession became more evident in the housing market. During this time, home buyers had access to a surplus of available housing, down payment assistance programs and lower interest rates, while low home prices and declining unemployment rates made many borrowers finally feel financially secure enough to purchase a home.

But when comparing millennial borrowers who bought a home from 2017 – 2019 (27.4%) and those who bought from 2020 – 2022 (18.2%), there is almost a 10-point drop in home buying. This could be due to a combination of the COVID-19 pandemic lending uncertainty as well as rising competition and home prices during this period. But even seeing the drop in home buying during these time frames, 63% of home purchases were by millennials who had student loans. This is up from 59.2% between 2017 – 2019, which could indicate the increase in millennial homeownership is due to the pause on student loan payments.

Still, 39.4% of millennials who took out student loans have never had the opportunity to own a house – and not because of a lack of interest. Of millennial borrowers who currently rent their homes or live with family or friends, 77% said they still have student loans to repay. But of this group, 96.2% want to own their own home someday, with 35.7% actively saving for their home purchase and an additional 45.1% planning to start saving in the future.

Of the millennial borrowers currently saving or planning to save for a home, the median home budget is between $200,000 – $399,999 with a median timeframe to buy in 1 – 3 years. And given the time it takes to save and build credit this plan seems reasonable even while considering student loan debt as it currently stands. However, the 19.2% of millennials who indicated they don’t plan on buying a home said it wasn’t because they don’t want to, but because they don’t believe they will be able to afford it.

So how would eliminating or lessening student loan debt potentially change the game for these prospective home buyers? When asked if they think there should be some type of student loan forgiveness, 83.1% of millennials said yes, with these borrowers believing there should be a median forgiveness of 50% of all student loans.

"16.9% of millennials don't believe in student loan forgiveness."

But with a good chunk of millennial borrowers already owning homes or currently saving to buy, how much would student loan forgiveness really help?

How Student Loan Forgiveness Could Impact Home Buyers

Student loan forgiveness would free borrowers from the obligation of repaying all or part of their federal student loan debt. When millennial borrowers who said they believe in loan forgiveness were asked if they would anticipate buying a new home in the near future should their student loans be forgiven, an overwhelming 79.6% said yes. Of those who originally planned on buying a home in the next 1 – 3 years, 79% said they would still stick with this timeline even if their loans are forgiven – likely needing the time to save for a down payment, closing costs and other home buying expenses. But 69.9% of millennial borrowers who intend to buy their first home in 4 – 9 years said they believe they could shorten that timeline to 1 – 3 years with student loan forgiveness.

The Impact Of Student Loan Forgiveness On Home Purchase

The reason for this is twofold. As previously mentioned, monthly student loan debt payments can make it more challenging to save for the cost of home buying. But millennials also agreed that while they believe a mortgage is a good investment for the future, it would only add to the amount of debt they’re already trying to pay off. And with the median student loan payment being $250 – $299 per month, it’s understandable that these prospective buyers may want to hold off on an additional monthly expense.

Though many millennials expect to adjust their home buying timeline should they qualify for student loan forgiveness, the amount they plan to spend interestingly remains the same, with the median home budget holding at $200,000 – $399,000. This lack of change may be due to an aversion to taking on additional debt, or because these individuals already have a clear understanding of how much home they can afford.

Of course, it’s important to recognize how socioeconomic status impacts the need for student loans to begin with, as well as the ease of repaying them overtime. Almost half of millennial borrowers (49.7%) are currently paying $199 or less on student loans each month. But when this population was asked if making student loan payments is easy or difficult, the group was evenly split. While millennials with a gross income between $75,001 – $105,000 per year said making loan payments was easy, those earning $45,001 – $75,000 said it was difficult.

So, what does all of this mean for millennial home buyers? Whether they see their current student loan payments as comfortable or cumbersome, student loan forgiveness is a comforting concept for the next generation of homeowners, especially when considering their dream home. But whether borrowers qualify for student loan forgiveness or not, homeownership is already a reality – or on the horizon – for many millennials.  


To understand how student loan forgiveness would potentially impact millennial home buyers, Rocket Mortgage surveyed 2,065 millennials between the ages of 26 – 41 who currently have student loans or have had them in the past. Participants who have not completed a minimum of an associate degree were screened out. This survey was conducted in April 2022.

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Katie Ziraldo

Katie Ziraldo is a financial writer and data journalist focused on creating accurate, accessible and educational content for future generations of home buyers. Her portfolio of work also includes The Detroit Free Press and The Huffington Post.