Student Debt Affects the Housing Market

In “So You Make $100,000? It Still Might Not Be Enough to Buy a Home,” * The Wall Street Journal recently looked at the increase in the number of six-figure-income families who rent instead of buy a home: “Student debt and meager savings cloud their financial future,” the story said.  The article explained how student debt was closely entwined with the housing market: “There is a connection between student loans and the housing bust, which isn’t lost on young home buyers. Many students took out loans because the housing crisis wiped out the equity in their parents’ homes that would have helped pay for college. Since then the amount of student debt outstanding has tripled, to more than $1.6 trillion. A couple of years ago Fannie Mae, the government-sponsored mortgage giant, made it easier for borrowers with higher debt levels to qualify for a mortgage, though recently Fannie tightened its lending standards.”

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