The New York Fed argues that student loan borrowers are also more likely to be highly educated and have higher incomes that make home ownership possible. That’s why borrowers had higher rates of home ownership in the past.But there’s another possible explanation, which is that 2003 to 2010 was during and immediately after the housing bubble—when lending criteria notoriously loosened. If you take a longer view, as Beth Akers at the Brookings Institution did with a different data set, the period when student borrowers were more likely to own homes looks like more of an outlier. (Akers’ data stops before 2011, the year the New York Fed analysts found that student debt-free households had higher home ownership rates.)
As Vox notes, even if the lax lending criteria of the past decade distorts the picture, there’s still a problem. Today a greater percentage of the overall population went into debt to pay for college than two decades ago. Consequently, a far larger number of people may be having trouble buying a house in the 21st century than the 20th, which isn’t good news for our economic outlook.See the Vox post for a few interesting graphs, and the NY Fed and Brookings for more data.