IRVINE, Calif. – Oct. 13, 2014 – The latest John Burns Real Estate Consulting study calculates that student debt will cost the housing industry approximately $83 billion in sales this year.
With college debt increasing nearly 6 percent annually, the trend will probably continue – and likely worsen – in the years to come. The researchers estimate that heavy college debt will slash real estate sales by 8 percent for 2014, and that households that pay $750 or more for college loan debt a month will be priced out of the residential real estate market entirely, forcing them to rent or find other living situations.
Another recent study found that approved borrowers had monthly college loan payments around $300. Home-loan applicants paying nearly $500 per month in student debt, however, were usually denied.
Those researchers wrote: “Using previous academic literature as a benchmark for our own complicated calculation, we then estimated that today’s purchase rate is reduced from the normal 8 percent depending on the level of student debt.”
Source: Housing Wire (10/08/14) Garrison, Trey
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