For many prospective homebuyers, the biggest obstacle to buying a home right now isn’t just mortgage rates or rising prices — it’s student loan payments.
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As repayment requirements fully resume following pandemic-era pauses, many first-time buyers are finding it harder to save for a down payment, qualify for a mortgage, or feel financially comfortable taking the next step into homeownership.
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According to the National Association of Realtors’ 2025 Profile of Home Buyers and Sellers, the average age of first-time buyers reached an all-time high of 40 years old. Many buyers are delaying major life milestones that typically drive home purchases, including marriage, starting families, or relocating for long-term stability.
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Student loan debt is a major part of that equation. The same NAR report found that 43% of first-time buyers cited student loans as the primary obstacle to saving for a down payment.
Now that federal repayment and enforcement have fully resumed, missed payments that were previously unreported are once again appearing on credit reports. For some borrowers, that can affect credit scores and monthly debt obligations — two factors lenders closely evaluate when approving mortgages.
The Numbers Behind Student Loan Debt
Before looking at what this means for buyers, it helps to understand the scale of student debt today:
Non-inflation-adjusted federal student loan balances reached $1.69 trillion in the fourth quarter of 2025
The largest share of borrowers carry balances between $20,000 and $40,000
Fewer than 10% of borrowers carry balances above $100,000
Borrowers over age 35 hold 62.5% of total student debt, while those under 24 account for 16.1%
Approximately 29.1% of federal loans in active repayment were in some stage of delinquency in late 2025
For many buyers, these numbers translate into one reality: homeownership timelines are shifting later, not disappearing altogether.
How Student Loans Affect Homebuying
Student debt impacts buyers in two primary ways — saving for a home and qualifying for one.
1. Down Payment Delays
The average federal student loan payment is about $382 per month. While manageable for many households, that recurring payment can significantly slow down savings for a down payment, especially for buyers targeting even a 5% minimum.
Analysis by NewHomeSource parent company Zonda shows that student loan payments may delay down payment timelines by more than seven years in some states, including Mississippi, Washington, D.C., New Mexico, and North Carolina.
For buyers already navigating high home prices and elevated interest rates, that delay can feel substantial.
2. Reduced Purchasing Power
Monthly payments also affect how much home buyers can afford once they begin shopping.
Zonda analysis indicates that a buyer without student loan payments could afford a home priced around $316,400. Factoring in the average monthly student loan obligation reduces affordability to roughly $298,700. In some states, purchasing power drops by more than $20,000.
In practical terms, that may mean choosing a smaller home, adjusting location expectations, or waiting longer before entering the market.
Why This May Be a Temporary Headwind
Despite the short-term challenges, there is a longer-term upside.
Historically, higher education has been associated with stronger earning potential over time. Between 2004 and 2024, households with a bachelor’s degree or higher saw median income rise by 13.1%, while households with only a high school diploma saw income decline by 0.9%.
That income growth suggests many buyers currently sidelined by student debt may re-enter the market later with stronger financial profiles.
In other words, many of today’s delayed buyers are not permanently priced out — they are simply arriving later.
What This Means for Buyers Right Now
Student loans remain a real hurdle for many first-time buyers, particularly those without existing home equity. But understanding how lenders evaluate debt — and how student loans factor into debt-to-income ratios — can help buyers plan more effectively.
For buyers carrying student loan debt, focusing on consistent savings, maintaining strong credit, and understanding affordability limits can help position them for homeownership when market conditions improve.
The Bottom Line
Student loan payments are reshaping when many Americans buy their first home, pushing timelines further out rather than eliminating demand altogether. While affordability challenges remain, the data suggests a large group of future buyers is building in the background — delayed, but not deterred.
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