Every year tuition seems to rise, increasing the amount of loans students are taking out and pushing loan debt past $1 trillion.
While the job market has seen more stability in recent months, employed graduates are less inclined to purchase homes and add to their large amount of debt. Lenders are just as hesitant to lend to prospective buyers with entry level salaries and large financial debt.
According to recent reports the average public university graduate has $29,400 in student loan debt as of 2012.
The major concern is the potential dip in homes sales because typically first time home buyers consist of nearly half the market. The raise in tuition, lack of jobs and economic problems of the last decade are changing the way lenders and graduates see home buying. Lenders are eager to provide students with funds for college under the assumption that they will see their investment plus interest once the student graduates and finds a career but that is proving to be more of a challenge than before. More and more students are deferring payments and siting lack of income as the reason.
You have a generation who has seen the effects of over burdening themselves financially and they have no desire to put themselves in that position. They are also a technology nomad generation who desire freedom and a mortgage is the opposite. Do you think the student debt will sink the housing market or will it stay steady?
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