New research from the Federal Reserve Bank of New York has linked the increase in college tuition and student debt to the decline of homeownership among young Americans.
According to a Bloomberg analysis
of the Fed’s report, up to 35 percent of the decline in young American homeownership from 2007 to 2015 has its roots in student debt loads, which doubled since 2009 to more than $1.4 trillion. The Fed speculated that if tuition stayed at 2001 levels, the approximately 360,000 additional young adults would have been homeowners in 2015. The research contradicts adamant claims by Obama White House economists and academics who insisted the connection was minimal or even nonexistent.
"States that increase the cost of education therefore may pay a price not in the form of declining workforce skill, but instead through muted housing-related spending and lower wealth accumulation among younger consumers in the years to come," the New York Fed paper said.