The amount of outstanding student debt is nearly $1 trillion. And a recent report from the New York Federal Reserve shows that debt is having a negative impact on the U.S. economy. The housing market depends on college graduates as a major source of new home buyers.
About 6.7 million of student borrowers, or 17 percent, are delinquent on their payments by three months or more; with the average balance on their loans being above $25,000.
Compounding the problem is that many of these borrowers no longer qualify for home loans. In 2005, nearly nine percent of 25- to 30-year-olds with student debt were granted a mortgage. By late last year, that percentage was down to just above four percent. The hardest hit segment were were those who owe $100,000 or more. A Pew Research Center survey found that the share of millennials who own their homes had fallen from 40 percent to 34 percent during the recession.
Young buyers now make up their smallest share of the housing market in more than a decade. (source CNBC.com)
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