Senator Elizabeth Warren’s plan could really help Millennials in particular to buy their first home faster, according to a recent study by Redfin.
Senator Elizabeth Warren introduced a proposal to cancel up to $50,000 of student loan debt per person. Redfin took her proposal and tried to see what it would do for young people in real life.
Redfin found that under Warren’s plan, a typical aspiring first-time homebuyer laden with student debt could save a down payment in nine years, three years faster than the 12 it currently takes.
Under Warren’s student debt forgiveness plan, the median 24 to 44-year-old homebuyer in Detroit, where the typical home costs $130,000, could save for a down payment in just 4.2 years—the shortest time in the nation—down from 7.4 years currently.
Redfin took student loan debt data by metro area from LendingTree, income data from the Bureau of Labor and Statistics, and their own home price data. They looked at a typical potential first-time homebuyer, earning the national average $65,879 of the Census Bureau’s 24-44-year-old age bracket, which includes most Millennials, currently aged 20-38 years old, with the national average $17,938 in student debt.
“The idea of taking on a mortgage when you’re still paying off tens of thousands of dollars in student loans is a non-starter for many people,” said Redfin chief economist Daryl Fairweather. “If student debt were eliminated, college grads would be able to start building wealth through homeownership, laying down roots and contributing to their communities years earlier in their lives. An influx of young, educated homeowners could have positive impacts on neighborhoods and society at large.”