Total Student Debt Could Buy Every House on the Market ... Twice

According to a new study by Realtor.com, total student debt could buy every house on the market in the US.. twice!

Part of this interesting article by Kelsey Ramirez is below:

"Total student debt in the U.S. reached $1.5 trillion, a new all-time high, according to a new study by realtor.com. But what does that mean for the housing market?

The number $1.5 trillion sounds like a lot, but how much is it really when you break it down? Divided out, the average student loan borrower owes about $34,500, that’s $8,500 more than the typical down payment of $26,000, or an average 10% of the median home price of $260,000.

Put another way, $1.5 trillion is enough to buy every single home on the market in the U.S. Twice.

Let that sink in.

“Student debt has ballooned to an all-time high as the price of education continues to outpace wage growth, and this is holding back many potential buyers from being able to purchase a home,” realtor.com Senior Economist George Ratiu said. “Student debt is already impacting borrowers’ ability to buy a home and education debt is expected to hamper consumers’ financial decisions for many years down the road.”

The Department of Education explained that because wage growth is stagnant compared to the rapidly rising costs of education, students are taking on more debt than ever before to cover their expenses. Since 1986, tuition at public universities has grown at four times the rate of wage growth."

See the link to the full article from Housing Wire.

Francis

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College Debt is Postponing Homeownership

This is not new news, and I already wrote about this earlier on this blog, but it is worth noting it again: college debt is a factor in postponing homeownership and a lot of other life decisions.

I just read this article from RISMedia, written by Suzanne De Vita (online news editor) which reiterates with fresh figures this pressing problem facing our youngest generation.  The National Association of Realtors is actively supporting efforts to find solutions and educate students as they take on new debt.  See the following NAR report on student debt.  As a result a majority of millenials are postponing several significant aspects of their life, such as marriage, starting a family, or starting any retirement savings.

Do you think getting a loan for your education should be more expensive than getting a loan for a car or a house?

Thank you for reading,
Francis

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Student loans causing housing shift...

An analysis by the Federal Reserve Bank of New York found that for the first time in at least a decade, households with student-loan debt are less likely to have a mortgage than those without student-loan debt.

Additionally, a survey by the National Association of Realtors found that 49% of Americans reported that student loan debt is a "huge obstacle" to homeownership.

I had already blogged in July of last year about student loans and the general concerns this is causing for the housing market; the average pay-off time for a student loan is 21 years! 
This is also the subject of an article just published in the SJ Merc. on Sept. 23 2014, indicating: a "consultant's study says 8% fewer houses sold in the U.S." (as a result of student debt levels).
The Consultant is John burns Consulting, an Irvine-based firm that advises homebuilders. The article is from Tim Logan of the Los Angeles Times.

Thanks for reading!
Francis


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