Student loan debt is impacting some first-time Millennial homebuyers.
According to the MagnifyMoney team, “Millennials with student loan debt tend to have larger mortgages on lower-value homes.
About 34% of millennial graduates with student loans are homeowners, while 36% of those without student loans are homeowners.” Where the equation changes are the price of homes bought by Millennials with student loan debt.
“The difference is those with student loan debt are buying homes priced about 5% less than those without.
As housing prices have risen dramatically around the country, Millennials making that first home purchase are seeing the long-reaching impact of student debt.
Beau Hodson founder and senior mortgage loan originator of San Diego-based Transparent Mortgage works with first-time Millennial buyers.
“As we think about student loans on the back end, we focus on students responsibly borrowing on the front end.” Covel’s national association represents college and university financial aid administrators.
“Every year a student takes out a new loan, they have to know what the total accumulated debt will be.
The Federal government gives students six months after graduation before they have to begin repayment,” she adds.
“With 42% of home buyers being first-time buyers and 71% of those under 37, student loan debt is a major factor in the housing market.” As interest rates are hovering at 5% and predicted to go higher it’s no doubt qualifying will become tougher.