U.S. student loan debt not killing homeownership?

October 23, 2014
Author: Weston, Liz, Reuters (10/20/14)

Student loan debt isn't keeping young adults from buying homes, according to some researchers and economists.

Jason Houle of Dartmouth College and Lawrence Berger of the University of Wisconsin-Madison have found only a "modest" inverse association between education debt and homeownership.

Chris Herbert, research director for the Harvard Joint Center for Housing Studies, determined that the median renter under 40 faced a monthly student loan payment of $150 in 2010 – an amount that he says does not deter people from buying.

A survey from Beth Akers and Matthew Chingas of the Brookings Institution's Brown Center on Education Policy, meanwhile, finds that today's student loan borrowers are no worse off than borrowers a generation ago.

Additionally, Moody's Analytics chief economist Mark Zandi notes that the soft job market, low wage growth and cautious lenders are bigger challenges for younger, first-time buyers. He says student loan debt "is having an impact, but it's on the margin."

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