Alarming Truths Reveiled in the Article Student Loan Debt Is Torpedoing Home Sales

635 Words Feb 17th, 2018 3 Pages
I found this article very interesting, and alarming at the same time. It also hits close to home, as I have a son graduating from college in May who is very anxious to buy his first home.
The article points out that student loans are at an all-time high. “Student loans are one of the fastest rising sources of debt. As of the third quarter of 2013, student debt stood at $1.027 trillion or about 9 percent of total household debt, up from about 3 percent in 2003.” (“Student Loan Debt Is Torpedoing Home Sales” RealEstateEconomyWatch.com 2014) It goes on to say that the average college graduate in 2012 graduated with student loan debt of approximately $29,400.
Student debt is now the second largest part of household debt next to mortgage debt. This “may have a depressing effect on home sales for years to come due a provision in the new QM rule, which took effect last month. The QM rule requires a consumer to have a debt to income ratio of no more than 43 percent including mortgage payments, will not make buying a home an easier for debt-straddled college graduates.” (“Student Loan Debt Is Torpedoing Home Sales” RealEstateEconomyWatch.com 2014) The new QM rule is intended to prevent consumers from getting trapped in mortgages that they cannot afford, and to prevent lenders from making loans that consumers do not have the…

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