Millennials who left cities to buy homes in the suburbs during the pandemic are facing a unique challenge as student loan repayments resume. According to Danielle DiMartino Booth, a former researcher at the Dallas Fed, this particular group of millennials, earning between $100,000 and $225,000, will not be able to access any financial relief while repaying their student loans. These borrowers, burdened with mortgage and car payments for the first time, will now have to juggle their housing costs along with student loan repayments, potentially leading to an increase in household bankruptcies.
This financial burden on millennials and their younger Gen Z counterparts adds to their existing financial challenges, including inflation, healthcare costs, and rising housing and car expenses. The resumption of student loan payments will only exacerbate the financial strain for those trying to balance their housing expenses. Conversely, student loan repayments also prevent younger borrowers from being able to afford homes, especially in the affordable housing market, making it even more difficult for them to enter the housing market.
Overall, the article highlights the overlooked group of millennials who left cities to buy homes in the suburbs during the pandemic. These higher-income borrowers will not receive any financial relief when repaying their student loans, potentially leading to an increase in household bankruptcies. Additionally, the burden of student loan repayments adds to the existing financial challenges faced by millennials and Gen Z, making it harder for them to afford homes in an already unaffordable housing market.