Most college graduates aged under 30 have painted an optimistic picture of their future, insisting they’ll be just as well off than their parents when it comes to housing, according to a new survey by the NHP Foundation.
The nonprofit, which works to provide affordable housing for young people, said that even those graduates who’re loaded with student debt seem to believe their future finances and housing situation will be just dandy.
But the researchers have questioned if such optimism is justified.
According to the survey, almost 60% of college graduates say they expect to “afford the kind of housing they most prefer” within the next five years. Another 70% said they rate homeownership as either “important” or “very important”.
The 20-30 age group has often been labeled as “generation rent” by some observers, due to many young adults being forced to rent long due to their high levels of debt and stagnant wages.
But some 46% of graduates said they expect to live on their own and pay rent without any kind of assistance from parents or roommates. But that optimism flies in the face of the reality, where more and more young adults are staying at home for longer. For example, in cities such as Los Angeles, Miami and New York, as many as 45% of young adults aged 20 to 30 still live with their parents.
And many of those have financial problems too. Over half of graduates surveyed admitted to being saddled with student loan debt, with 10% owing $50,000 or more. But 40% believe they’ll have these loans paid off within three years, though researchers say 10 years-plus is a more likely. For example, the report cites statistics that show average bachelor’s degree graduate takes 21 years to pay off these loans.
Still, NHP’s researchers conceded that graduates aren’t always unrealistic about their finances. Some 67% of respondents said they expect to pay around 30% of their income on rent, which would put them in the “cost burdened” category.
“We were surprised to learn that 54% of these young graduates know that they could potentially qualify for affordable housing under HUD’s definition,” said Richard Burns, president and CEO of The NHP Foundation. “This helps us understand how we need to consider housing to suit these renters, who may be in apartments for longer than they think.”