Is Student Debt Impacting the Housing Market?
A Look on what NAR is doing to address the issue of growing student debt.
Roughly 40 million Americans have student debt. Out of the 40 million with debt, about 7 million have defaulted on their loans. This is the equivalent to about 2% of the United States population. The concerns of student debt are growing, and are impacting the housing market. Steve Brown, President of the National Association of REALTORS® recently discussed the burden of student loans, and how it is a serious issue for young adults and REALTORS®.
According to the Financial Protection Bureau, three-quarters of shortfalls in household formation is due to young adults ages 18-34 not forming a household. What is the main reason for this? The debt resulting from the cost of their education is preventing them from buying a home. NAR’s (National Association of REALTORS®) research showed 49% of Americans cited student debt is a huge obstacle to home ownership. To put this into perspective, first time buyers are 29% below their peak of 50% of market in 2009.
President Steve Brown stated “This is a troubling fact because REALTORS®, like most Americans want to see the American dream available to the next generation and to see them enjoying, owning, and living in their own home like we have.” Steve Brown sent a thank you letter to the Chairman of the Senate Budget Committee Patty Murray, for holding a public hearing on the impact of student loan debt both on borrowers and lenders, and the economy as a whole. Chairman Patty Murray discussed how most Americans with debt are not only finding it hard to save for even a down payment, but their high monthly bills to pay back loans are disqualifying many for mortgage loans.
“We will continue to work with policy makers to protect the dream of homeownership for all Americans including those with rising student debt” Said Brown.
For more information, please continue to check out ACAR’s news as we will be updating you on the latest news