Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Us - College Debt And Home Buying

Recommended Posts

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.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   205 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.