Getting millennials on the home-ownership ladder is the single most important thing we can do to create a more stable and prosperous future for the United States—but our overpriced higher education system is getting in the way. The Wall Street Journal reports:
Americans continue to default on student loans at a “stubbornly high” rate, and a small share of borrowers are unable to buy homes due to high levels of student debt, according to a new report from the Federal Reserve Bank of New York. […]
The report notes that homeownership rates are far higher for those who graduated from college than those who never earned a degree. But it also shows that “those with significant student debt are much less likely to own a home at any given age than those who completed their education with little or no student debt.”
Homeownership encourages family formation; it strengthens civil society; and it is the best vehicle for middle-class families to save for retirement.
Older millennials have already been set back from entering the workforce at a time of slack labor markets. That is beginning to change, but the combination of relatively low wages, relatively high student debt and high home prices thanks to anti-development policies have seriously damaged the prospects of millions of young and youngish Americans.
Making housing work for the rising millennial middle class should be job number one for policymakers. And finding cheaper alternatives to the bloated higher education system—by breaking the accreditation cartel, fostering vocational education, and making colleges have skin in the game—is an important part of the answer.