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http://www.nytimes.com/2014/07/06/realestate/college-debt-and-home-buying.html?ref=business&_r=0

Swelling student loan debt is commonly cited as a primary factor in the declining homeownership rate among 25- to 34-year-olds. But are the two really related?

While homeownership is down nationally since the housing market collapse, the drop among younger adults is particularly striking. Rates in the 25-to-34 age group dropped by nearly 8 percentage points from 2004 to 2013, according to a recent report from Harvard University’s Joint Center for Housing Studies.

Over the same period, student debt soared by more than 400 percent to top $1 trillion — a run-up that dwarfs the surge in mortgage debt during the housing bubble, said John Dyer, the lending practice lead for the Carlisle & Gallagher Consulting Group, which serves the financial services industry. He predicts the debt level will be a drag on home buying for years to come.

The so-called millennial generation born after 1980 has proved more reliant on student loans, Mr. Dyer said, in part because of rising education costs, a prolonged weak economy and higher unemployment. And a high debt burden makes it difficult to afford a home or qualify for a mortgage.

“What seems to be happening is you have a pause in your housing pipeline,” Mr. Dyer said. “Where a younger generation would normally be buying homes, it’s just not happening.”

Last year, a study by the Federal Reserve Bank of New York suggested that student debt was suppressing homeownership. Before 2009, the researchers found, 30-year-olds with student loan debt were far more likely to be homeowners than those without it, in part because of their higher levels of education and incomes. But the gap between homeownership rates of 30-year-olds with loan debt and those without began to close during the recession. And by 2012, the trend had reversed.

An excellent move for the UK economy landing students with large debts so they can't afford a house. Looks like we need another bailout so students can afford to buy.

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  • 406 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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