Young Americans don't buy homes because of student debt loads: study

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Tuition hikes and students' growing debt burden in recent years have resulted in a sharp drop in homeownership among young Americans, according to new research by the Federal Reserve Bank of New York.

As much as 35 percent of the decline in young Americans' (ages 28 to 30) homeownership from 2007 to 2015 is due to higher student debt loads, the research estimates.

Harvard University /VCG Photo

The repercussions could be huge for the US economy, as purchasing property is the primary way US households build wealth. With less wealth, young Americans could cut their spending; household spending accounts for around 70 percent of US economic growth.

Besides, the study also challenges a popular idea that more education will bring about more wealth in the future regardless of its swelling costs.

Although college tuition has kept rising in recent years, young Americans are now more highly educated than their predecessors, as the federal government has invested nearly 1 trillion US dollars in loans, grants, and tax credits to college students since 2010, the research shows.

(Source: Xinhua)