According to a study done by Zillow.com, the only way
student debt can negatively impact young professionals interested in
starting a family and “settling down” to buy their first home is if that
debt is combined with no degree at all. According to the study,
student debt is not an obstacle to homeownership with those students who
finished with a bachelor’s degree or higher for the amount of debt they
acquired. Home buyers that are college graduates and never had to take
on student loans have a higher chance (70%) of becoming a homeowner
than home buyers that have student debt and at least a bachelor’s
college degree, but not by much – the statistic only drops to 66% for
these types of buyers.
Because
of the Recession and the lack of jobs for college graduates upon
completing college, many young people did not get married and start a
family right away, so household formation was also a considering factor
in the study done by Zillow.com. The study seemed to indicate that
people were waiting until their 30’s to have children, and the study
included those couples that had actually started a family with at least
one child.
High rents were also a factor as being a deterrent for young professionals to be able to buy a home. The payment of higher rent made it impossible for them to get the larger down payment together upon trying to get financing for a conventional mortgage. The FHA just recently reduced the percentage of down payment required for both FHA and Rural Development loans, so this factor will not be as pertinent moving forward.
The truth about young professionals becoming homeowners is that student debt is not an obstacle to homeownership, and the possession of a bachelor’s degree or higher and the acquisition of a good job after college has made it possible for these students to be able to buy a new or pre-existing home upon graduation (or later). This is good news for the housing market as one more positive sign that the real estate market is moving in the upwards direction.
Click Here for the Source of the Information.
Because
of the Recession and the lack of jobs for college graduates upon
completing college, many young people did not get married and start a
family right away, so household formation was also a considering factor
in the study done by Zillow.com. The study seemed to indicate that
people were waiting until their 30’s to have children, and the study
included those couples that had actually started a family with at least
one child.High rents were also a factor as being a deterrent for young professionals to be able to buy a home. The payment of higher rent made it impossible for them to get the larger down payment together upon trying to get financing for a conventional mortgage. The FHA just recently reduced the percentage of down payment required for both FHA and Rural Development loans, so this factor will not be as pertinent moving forward.
The truth about young professionals becoming homeowners is that student debt is not an obstacle to homeownership, and the possession of a bachelor’s degree or higher and the acquisition of a good job after college has made it possible for these students to be able to buy a new or pre-existing home upon graduation (or later). This is good news for the housing market as one more positive sign that the real estate market is moving in the upwards direction.
Click Here for the Source of the Information.
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