Are Student Loans Hurting Housing Recovery? | RealtyPin.com

NEW YORK, March 11, 2013 /PRNewswire-iReach/ -- According to the real estate experts at Realtypin.com, first time buyers are going to play a big role in the housing market's recovery. The more of them that enter the market, the sooner it will be headed towards full strength. The more of them that sit on the sidelines, though, the longer it will take for the market to gain steam.

There's just one problem with that scenario – many of the would-be first time homebuyers are stuck paying off giant student loan debts. So, will those debts prevent the housing market from making a full recovery?

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They certainly could!

At the end of 2012, student loan debt was the second-largest type of debt in America, only behind mortgage debt. According to the federal Consumer Financial Protection Bureau, America's 20-somethings are currently dealing with $1 trillion worth of student loan debt – an amount that has tripled in the past eight years!

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Making matters worse, today's 20-somethings are having trouble finding jobs that pay enough to enable them to pay off all of those student loans after they graduate. As a result, almost one-third of student loan borrowers were delinquent by the end of 2012. (At the end of 2008, when the recession had barely begun, about 25% of student loan borrowers were delinquent.)

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So, 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. And, for the nearly 33% of them that are delinquent, the damage to their credit ratings could be so severe, that it could take them years to recover – meaning that they won't be able to get approved for a mortgage for quite some time, even if they want to.

In fact, right now, these borrowers have one thing on their minds – to stay afloat, financially. While recent studies have shown that young Americans still believe that home ownership is a big part of the American dream, many of today's 20-somethings just don't have the financial means to get there yet. In fact,

That means the pool of first time buyers that the market is so desperate to see is much, much smaller than you may have originally thought!

The one thing working in the housing market's favor when it comes to that smaller pool? Rising rents. With rent prices at an all-time high in many cities, more 20-somethings are turning to home ownership, simply to save money!

Bottom line – the first time buyers are starting to trickle into the market, but student loan debts will force many of them to stay on the sidelines indefinitely. Media Contact: James Paffrath RealtyPin.com, 1-(866) 960-8649, [email protected]

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SOURCE RealtyPin.com