Student Loans Cause Decline in Home Buying
Student loans are having a big impact on the economy, and a new survey shows the real estate market is now being significantly impacted.
According to a survey from One Wisconsin Institute, people with student loans are 36% less likely to own a home. This is because the money they could have spent on a home is being used to pay back their educational debt.
Typically, first-time home buyers account for roughly 40% of the homes sold in America every year. If fewer of them buy homes in the coming years, the buying pool for people selling homes will be substantially decreased. In a single year, these first timers went from being 34% of the buying population to only 28%. That decline is not a good indication for the future of the real estate market.
Some experts suggest that student loans aren’t the only issues fueling the drop. Many say first-time home buyers are losing out on the homes they want because consumers who have been in the real estate market are willing to pay cash for the same homes. Another issue these buyers are facing is the high down payment requirements banks have put in place. Many simply cannot save 20% of the purchase price for the house they want.