Total student loan balances nearly tripled between 2004 and 2012, according to a new survey from the Federal Reserve Bank of New York. Now $1 trillion in collective student loan debt is directly affecting the housing recovery.
First-time home buyers usually make up over 40 percent of the home buying population, but their share has hovered at or below 30 percent during this recovery, according to the National Association of Realtors (NAR). The student debt burden has forced many potential buyers to rent or to move back in with their parents.
This raises the question of the ability of the important 25 to 35 age group, which comprises the core of first time home buyers, to purchase a home in the near future. The answer is that many will not be able to buy. Adding to the burden is the fact that one-third of student loan borrowers are delinquent on their debts, according to the Federal Reserve report. That directly affects their credit rating and, in today’s strict credit environment, will keep them out of the mortgage market for years to come.
How do you qualify for a mortgage when your student debt already amounts to the equivalent of one?
Wallingford Real Estate – Wallingford, PA 19086
