Why are students renting rooms for college?
Homeowners in the US are increasingly renting rooms at their homes as they struggle to pay for the cost of a mortgage and other housing expenses.
Here are some of the ways the trend is affecting students: – Students are starting to use rental properties as their primary residence.
In a survey conducted in April by the nonprofit National Student Housing Alliance, 38% of students said they rented their home as their main residence, up from 22% last year.
About a quarter said they rent their home for study.
The trend reflects the growing popularity of rental homes for college and university students.
– A growing number of renters are paying for college, too.
In April, more than half of college students said their monthly expenses for tuition and room and board totaled at least $1,300, up 6% from last year, according to a survey by the National Student Association.
About 36% said they pay at least some of their expenses on their student loans, up 7%.
– Rental housing has become more expensive as student loan interest rates have gone up.
Student loan interest costs have risen from $2,600 in 2013 to $3,400 in 2016.
As a result, many renters are using their home to pay their debt, with the median loan amount rising from $500 in 2013, to $800 last year and to $1.2 million in 2020, according the National Association of Realtors.
– College students who are paying off student loans are moving into more affordable rental properties.
In the past two years, more students have moved into rental homes, according a survey of 1,000 students by the College of William & Mary.
More than half said they were renting their home in 2018, up about 20% from 2015.
That is particularly true of first-time buyers, who are moving in with the intention of refinancing their student debt.
– The trend has also accelerated for millennials.
In 2016, 29% of first graders and 24% of college grads said they had borrowed at least one year of college, up 15% from 2007.
The number of borrowers with a bachelor’s degree or higher jumped from 24% in 2015 to 33% last summer.
The survey also found that 30% of young adults who graduated from high school in 2019 or earlier were now in repayment plans.
– There are also fewer students moving into rental housing in some parts of the country.
In May, the New York State Housing Authority said it would phase out the state’s $4,200 rent-to-own program for new rental properties beginning in 2019.
The agency said the program would end by 2022 and the program could end by 2024.
But the housing authority is only allowing new rental homes to be built if developers include student loan payments and a down payment of $150,000, a threshold that has been set by the New Jersey state Legislature to make it easier for students to afford college.
“We’re making it easier to build student housing,” said Elizabeth Scharfenberg, executive director of the state agency.
“What we’re saying is we can’t continue to subsidize rental housing when we know there’s a shortage of affordable housing.”
– Rents are falling and landlords are more aggressive about selling their properties.
A survey by The Wall St. Journal last month found that in June, rental rates fell by 9% across the US and rental vacancies rose by 7%.
But a survey released Tuesday by the real estate research firm Zillow found that rents are rising in major metro areas.
The median rental price in New York City is $1 of $7,500, up 4% from a year ago, the firm found.
The same month, rents in San Francisco rose by more than 8%, to $2.65 per square foot, while rents in Los Angeles climbed by more 10%, to more than $3.50 per square feet.