As student debt loans increase every year, the struggle to pay for college debt is replacing mortgage savings, Chopra said:
...student indebtness impacts the credit profile of first-time homebuyers. Three-fourths of the fall in household formation can be directly correlated to student debt.First-time home buyers represent a significant section of the house market. On average, 40 percent of houses bought are by first-time buyers.
For the past 30 years, the typical first-time homebuyer has been 30-32 years-old, according to the National Realty Association’s annual home buyer survey.
A tough job market and over $1 trillion in student debt has the next generation unable to think about a future home. Only 32 percent of buyers this August bought a house for the first time. Compare that to three years ago, when first-time buyers made up 50 percent of the total. And over a quarter of first-time buyers had to rely on their parents to afford a down payment on their house.
With student debt on the rise, experts predict it will get worse. Nearly half -- 40 percent -- of the 25-year-old who are expected to buy houses in the next five years hold student loan debt. Their average balance is $25,000 – and one in every seven graduates with student loan debt currently defaults in the first three years.
So much for young people's home-buying dreams. And for their parents hopes of an empty nest.
