In order for the housing industry to make a full recovery, one of the most important aspects is that first-time homebuyers re-enter the market by owning a home and not renting an asset.
But according to real estate insiders at Realtypin.com, there is a major problem first-time homebuyers are currently battling: giant student loan debt.
Through the end of 2012, almost one-third of student loan borrowers were delinquent, Realtypin.com said. Meanwhile, at the end of 2008—when the recession had just begun—about 25% of this segment was late on their monthly loan payments.
“If these young adults can’t keep current on their student loan payments, there’s no way they’re going to be able to afford a mortgage on top of it all,” Realtypin.com said in a press release.
Another characteristic affecting these borrowers is the difficulty they are having finding jobs that pay enough to enable them to not only pay for a future mortgage, but to get them out of their current student loan debt.
According to the Consumer Financial Protection Bureau, young adults are now dealing with $1 trillion of student loan debt, an amount that has tripled in the past eight years. CFPB said student loan debt was the second largest type of debt throughout the country, only behind mortgage debt.
Furthermore, for those borrowers who are delinquent in student loan debt, the damage to their credit ratings could be so severe that it could take years for them to recover. If this is the case, the borrowers won’t be able to get approved for a mortgage even if they want to.
A Prudential Real Estate survey found that out of 5,000 people between 25 and 64 years old who either recently bought or sold a home or said they were considering buying or selling a home, 63% said they have a favorable perception of the residential real estate market right now.
Despite the fact many young buyers are
