All buyers want to live comfortably, whether they're feeling cramped in a current home or are looking for more space in their investment.
Rising student debt hampers housing growth
A new report from Bloomberg indicates that first-time homebuyers are having difficulty securing loans thanks to student loan debt totals nearing $1 trillion.
student debt, housing recovery, rising, Bloomberg
A new report from Bloomberg indicates that first-time homebuyers are having difficulty securing loans thanks to student loan debt totals nearing $1 trillion. Analysts suggest this is one reason the housing market is still struggling to recover despite record-low mortgage interest rates.
A Federal Reserve white paper sent to Congress Jan. 4 reveals that from 2009 to 2011, just 9 percent of 29- to 34-year-olds got a first-time mortgage; that number is down 8 percent from a decade earlier. The National Association of Realtors found that the same age group accounted for 27 percent of all homebuyers in 2011, compared to 33 percent of the market in 2001.
The struggles for this segment have bogged down the market as a whole, which has seen increasing buyer confidence and sales carrying over from the end of 2011. Many analysts believe first-time homebuyers will be a crucial part of any housing recovery, as they would likely be purchasing homes from current owners; those owners, or “move-up buyers,” would then be able to pursue larger, more expensive homes.
As student loans totals continue to rise, housing prices are still on the decline, and possibly going lower. Despite this fact, and with the average 30-year fixed rate mortgage at 3.87 percent — its lowest mark in 40 years — more and more homeowners are finding themselves underwater with their mortgages.
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