Student loan debt is increasingly emerging as an obstacle for renters, casting a shadow over multifamily rent growth and lease-up prospects. The pressure of educational loans is now materially affecting both present rental household health and the future pipeline of would-be multifamily tenants, according to comments made during a webinar by Ivy Zelman, executive vice president of research and securities at Zelman, a Walker & Dunlop Company. While multifamily absorption has remained robust in key migration markets, delinquency data demonstrates growing divergence between renters and owners.
Zelman noted that as of 2025, renters bore the brunt of rising student loan obligations, with delinquency rates substantially higher among rental households. She drew particular attention to the impact federal student loans have on financial behavior: “Those making less than $50,000 are seeing the greatest delinquencies, and a significant share of renters are now being negatively impacted by student loan payments,” she said, citing recent proprietary survey results from builders and realtors.
With forbearance and deferment periods lapsing, monthly payments for millions of federal borrowers have resumed, resulting in widespread credit score declines and wage garnishments—both new headwinds for rental housing demand and future mobility.
Housing market participants are already observing the effects. According to Zelman, 10% of prospective buyers cannot get approved for a mortgage due to student loan debt, but the problem is far more acute in the renter universe.
Realtors surveyed by her firm reported that approximately 14% of would-be multifamily tenants faced student-loan-related credit hurdles, a non-negligible figure that suggests significant friction in converting renters to buyers or qualifying for new leases. “[Student loan debt] can’t be distinguished through bankruptcy,” Zelman pointed out, emphasizing that these constraints will persist for as long as incomes fail to keep up with elevated debt burdens and living costs.
Zelman shared that the shift is already impeding absorption for new multifamily product in several major markets, as more stretched renters face broader budget pressures from other forms of consumer debt. She stated, “There’s a lot of non-discretionary costs that have been elevated…renters really have to prioritize shelter costs alongside rising utilities, medical care, and food.”
As multifamily owners confront the churn between household formation, delinquencies, and move-in prospects, investors may need to recalibrate market expectations for both rent growth and tenant stability in coming quarters.
While multifamily remains an attractive alternative to homeownership for price-constrained households, the increasingly punitive nature of student loan debt is reshaping the sector’s demand fundamentals. Zelman sees this as a “big story that’s not being talked about enough,” with multifamily operators and investors likely to encounter slower absorption, more tenant turnover and rising credit risk as student loan headwinds intensify throughout the industry for years ahead.
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