Is student loan debt holding Millennials back from buying a home?
By Matt Joy, Princeton Mortgage Wholesale
Yesterday, I mentioned that there might be more of an appetite for refinances in 2018, but when will we see Millennials flex their buying power and invest in new homes? I’m not sure it’s going to be any time soon… as a new report from HousingWire states that nearly 40% of students with college loans could default by 2023. Wow… that’s a staggering number and maybe the CFPB should do a hard pivot away from the mortgage industry and start considering how our country lends money to students… we might uncover some things there.
Now, rather than dive deeper into that statement… I’ll let everyone put their own opinion’s together after reading the HousingWire report… I’ll speak from personal experience. As a Millennial myself, I left college with close to $70K in debt and to be honest the LAST thing I wanted to do was buy a house and plunge myself into more debt. I know, I know… a mortgage is an asset and I shouldn’t look at it as debt, but the truth is after getting a job, all my income went into paying my bills! I didn’t have the opportunity to live with Mom or Dad, so I had to pay rent, utilities, had to have a car… so there was a payment there, cell phone and then top it off with a $600 a month payment on my student loans! Where was there income to save a penny? So, I made it my mission to pay off my student loan debt first and as I enter the last 2 years of payments on them I’m finally beginning to dip my toes into real estate. It just makes sense for me now. Clear off all my debt, save as much as possible and then invest in a house.
I’m not saying this situation applies to everyone. I know everyone has their own journey, but I can see why some Millennials might be hesitant about entering the housing market. Now, if what HousingWire is reporting comes true… lenders will have to come up with some creative products for first time home buyers who have bad credit and no down payment because they defaulted on their student loans. It’s an interesting situation that we have on our hands and as the country’s wealth shifts from the Baby Boomers to Gen X/Millennials student loan debt is something to consider as a road block facing first time home buyers.
My Pittsburgh Steelers are set to take on the Jacksonville Jaguars in the divisional round of the playoffs this Sunday at 1PM. The game will be hosted dahhn (that’s down said with a Pittsburgh accent) on the North Shore in Heinz Field and it’s going to be nuts in there. The temperate is going to be freezing and those terrible towels are going to be waving! Before I give you my prediction I want to leave you with a piece of trivia… there has only been 1 team to play the Pittsburgh Steelers twice at home in one season and beat them both times… who is that team?
Yep. The Jacksonville Jaguars. In 2007 the Jags and Steelers were in the same division. They beat us in the regular season and then again in the AFC Wild Card game. I don’t foresee history repeating itself. The Steelers protect the football and win a tight one 26 – 23.
The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.