How Student Debt can Hurt the U.S. Housing Market

Student Loan Debt.
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It’s really not a secret that student debt has and is hurting the U.S. Housing Market. Many first-time home buyers have to turn to a relative for help with the down payment.  In addition, many potential buyers under 35 years of age decide not to buy due to student loan payments.

The central banking system released a report recently showing student loan debt has dramatically risen.  In addition, the Wall Street Journal reported the rise in student debt has been at least somewhat responsible for the drop in home-ownership levels.

Since the pre-recession peak, the home-ownership level in the United States has dropped significantly.  From age 24 to 32, it dropped 9% from 2005 to 2014.  The Fed believes at least 2% of that drop is directly related to student debt.  This is equal to about 400,000 borrowers unable to buy a home because of student loans.

Student Debt Reaches $1.5 Trillion

With student debt reaching $1.5 trillion many potential buyers are deciding not to buy. Those falling behind on student debt payments struggle to get approved for a mortgage, while those making their payments on time don’t have enough left to save for a down payment.

Homeownership is Trending Up

Since 2016, home-ownership has started to trend up. It has hit a bottom of 62.9% in 2016 but has been working back up.  Freddie Mac has predicted home-ownership among young adults may reach as high as 60% by 2025.

However, student loan debt isn’t going down and accounts for more than 10% of all debt in the country.  This is a higher debt category than auto loans and credit card debt.

While student loans may be keeping some from buying one of the homes for sale in Mint Hill, NC, there is confidence younger buyers will start entering the market in higher percentages.  Student debt is still a huge issue and a rising problem for younger buyers.

When it comes to Mint Hill real estate it’s certainly not impossible for younger buyers to enter the market.  Finding the right home to fit your budget helps and paying down or paying off some of your student debt first is also helpful.  However, even with student loan debt, you may be able to buy a home instead of continuing to rent.

I would love to be part of your journey when the time is right for you.  If you ever have a real estate question or need, or know someone who does, trust that you can turn to me.  I will help you make the right move!  Anna Granger 704-650-5707 |

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