Student debt burden hurting the housing recovery

The student loan crisis is devastating the housing recovery, according to Rohit Chopra, student loan ombudsmen for the <a href="http://www.consumerfinance.gov/" rel="nofollow">Consumer Finance Protection Bureau</a>, <a href="http://www.housingwire.com/articles/27303-cfpb-student-loan-debt-hijacks-the-housing-recovery">at a conference presentation late last week</a>.<br /><br />As student debt loans increase every year, the struggle to pay for college debt is replacing mortgage savings, Chopra said:<br /><blockquote class="tr_bq">...student indebtness impacts the credit profile of first-time homebuyers. Three-fourths of the fall in household formation can be directly correlated to student debt.</blockquote>First-time home buyers represent a significant section of the house market. On average, 40 percent of houses bought are by first-time buyers.<br /><br />For the past 30 years, the typical first-time homebuyer has been 30-32 years-old, according to the National Realty Association’s annual home buyer survey.<br /><br />A tough job market and over $1 trillion in student debt has the next generation unable to think about a future home. Only <a href="http://www.thefiscaltimes.com/Articles/2011/10/12/Housing-Virgins-Meet-Todays-First-Time-Homebuyer#sthash.VeklELT9.dpuf">32 percent of buyers this August</a> bought a house for the first time. Compare that to three years ago, when first-time buyers made up 50 percent of the total. And <a href="http://www.thefiscaltimes.com/Articles/2011/10/12/Housing-Virgins-Meet-Todays-First-Time-Homebuyer#sthash.VeklELT9.dpuf">over a quarter of first-time buyers had to rely on their parents</a> to afford a down payment on their house.<br /><br />With student debt on the rise, experts predict it will get worse. Nearly half -- 40 percent -- of the 25-year-old who are expected to buy houses in the next five years hold student loan debt. <a href="http://finance.yahoo.com/news/gen-yers-delay-first-time-104900279.html">Their average balance is $25,000</a> – and one in every seven graduates with student loan debt currently <a href="http://www.huffingtonpost.com/2013/09/30/student-loans-default_n_4019806.html">defaults in the first three years</a>.<br /><br />So much for young people's home-buying dreams. And for their parents hopes of an empty nest.

CFPB housing market student loan crisis Student debt burden hurting the housing recovery

The student loan crisis is devastating the housing recovery, according to Rohit Chopra, student loan ombudsmen for the Consumer Finance Protection Bureau, at a conference presentation late last week.As student debt loans increase every year, the stru…

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