Are Student Loans Causing a Shift in the Housing Market?

May 22, 2014

Debt keeping grads from buying homesAs we have talked about first-time home buyers not qualifying for loans, many experts point to the fact that those who would be in the first-time buyer market haven’t had time to build up strong credit and/or savings for a down payment because of unemployment. However, a new study armed with a Pew survey cites that student loans are proving to be a big contributing factor in the delay of first-time home buyers getting a mortgage.

While it certainly makes sense, previously no student loan implications were involved in the discussion of why first-time buyers were missing from the market. The study, which was aided by the National Association of Realtors, found that as many as 49 percent of Americans cited student loan debt as a “huge obstacle” to homeownership. It is now to the point where the number of college-educated first-time home buyers in the market is at 10-year low.

To help combat this, the Consumer Financial Protection Bureau will send examination teams to find, report and fine student loan servicers who are making it harder to pay off debts. There have been increased complaints that servicers are not being held accountable for devious activity, such as making it difficult to prepay portions of the loan and charging excessive fees to borrowers for servicing processing errors. The Consumer Financial Protection Bureau hopes that by dealing more closely with these issues, the path can become clearer for graduates to become first-time home buyers.

Are there other parts of the equation missing that are keeping college grads from becoming first-time home buyers in Chicago? If so, let us know in the comments!

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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