The home ownership rate among college graduates is less than non-grads for the first time on record, according to the New York Federal Reserve.
College graduates are facing increasing obstacles to home ownership, mostly due to high debt levels and weak job prospects. The delay in Millennials entering into home ownership could be a drag on the housing industry for years to come, CNNMoney reports.
The average student loan debt has climbed to $27,500, according to data from the Project on Student Debt. Lenders factor in debt—including student loan debt—when calculating how much mortgage they’ll give a person to buy a home. What’s more, if young professionals miss a payment on their student loans, that can damage their credit scores and further hamper their chances for qualifying for a mortgage.
However, renting a domicile is also an important stepping stone to home ownership. Thirty-six percent of young graduates are living with their parents, according to a Pew survey. That has prevented them from building credit histories, which they also need to get a mortgage.
Some of the effect has already been seen in the shrinking number of first-time home buyers. The National Association of REALTORS® reported in their September housing numbers that first-time buyers accounted for 28 percent of existing-home purchases, down from 32 percent in September 2012.
Source: “Young and Smart, but Millennials Face Homebuying Hurdles,” CNNMoney (Oct. 31, 2013)
College graduates are facing increasing obstacles to home ownership, mostly due to high debt levels and weak job prospects. The delay in Millennials entering into home ownership could be a drag on the housing industry for years to come, CNNMoney reports.
The average student loan debt has climbed to $27,500, according to data from the Project on Student Debt. Lenders factor in debt—including student loan debt—when calculating how much mortgage they’ll give a person to buy a home. What’s more, if young professionals miss a payment on their student loans, that can damage their credit scores and further hamper their chances for qualifying for a mortgage.
However, renting a domicile is also an important stepping stone to home ownership. Thirty-six percent of young graduates are living with their parents, according to a Pew survey. That has prevented them from building credit histories, which they also need to get a mortgage.
Some of the effect has already been seen in the shrinking number of first-time home buyers. The National Association of REALTORS® reported in their September housing numbers that first-time buyers accounted for 28 percent of existing-home purchases, down from 32 percent in September 2012.
Source: “Young and Smart, but Millennials Face Homebuying Hurdles,” CNNMoney (Oct. 31, 2013)
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