There's been lots of debate lately in housing circles about the impact of student debt on home ownership.
Now there's a new study out that attempts to put a number on that impact: 414,000.
That's how many home sales will not happen this year because of high levels of student loan debt, according to a report from John Burns Consulting, an Irvine-based firm that advises home builders. That's equal to about 8 percent of all home sales, and enough to dent the housing industry by $83 billion a year.
The report estimates that the number of households under age 40 that owe $250 or more each month in student loans has nearly tripled since 2005, to 5.9 million. And it projects that every $250 in monthly student loan payments decreases home borrowing and purchasing power by $44,000. Figure a typical sale price of $200,000, throw all that together, and you get $83 billion in lost sales.
"We actually think it's pretty conservative," said Rick Palacios, director of research at John Burns Consulting. "We're only looking at people age 20 to 40. We know there's a big chunk of households over age 40 who have student debt, too."
Read more at The Los Angeles Times: http://www.latimes.com/business/realestate/la-fi-student-loan-debt-housing-market-20140922-story.html