How worry over student debt is reducing first-time home sales.
Mounting student loan obligations will hold back home sales by about 8 percent this year, predicts John Bums Real Estate Consulting QBREC).
A report released by the advisory firm on Sept. 19 studies the effect of this debt on homebuying among heads of households younger than 40.
Generally, borrowers' purchasing power declines by $44,000 with every $250 per month in student loan debt, JBREC says. A typical entry-level homebuyer who pays $750 a month toward their student loan balance, for instance, would be eligible for a mortgage of $103,280. But borrowers who owe more than that per month will be priced out of the market unless they happen to earn an above-average salary. Borrowers with smaller monthly obligations also are affected, the report finds. About 127,000 borrowers who pay $100 to $250 per month toward student loans will not be able to buy a home, and some 57,000 others whose monthly student loan obligation is less than $100 also will not enter the homeownership market this year, the report notes.
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|Title Annotation:||data insider|
|Date:||Nov 1, 2014|
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