Student Loan Debt and The Effect On Housing

Student loan debt is becoming an increasing problem in our culture. While students seek to better themselves with a college education, the increasing cost of a college education continues to require a need to lean on student loan debt. But this student loan debt is creating an obvious financial burden that is making it difficult for students to put money into other sectors of the economy.

Student Loan Debt

Gary Keller announced at the 2014 Mega Agent Camp for Keller Williams that in 2003 consumer debt was just over two trillion dollars with student loans accounting for less than .25 trillion. The amount has increasingly accounted for more and more of the debt burden.

Student Loan Debt - The Romanski Group

In 2014, consumer debt has increased to 3 trillian dollars with student debt accounting for more than 1 trillian dollars. The student loan debt burden then has increased by more than 400% while the total debt burden has only increased by 50%. This obviously is an increasing problem.

Why is the increased student loan debt a problem? While student loan debt increases, students who in the past would have graduated and been able to buy a home are now having to focus more and more on paying off student loan debt. This means there are less eligible buyers.

Mark Cuban, a billionaire entrepreneur who is famous for his role on the television show Shark Tank, suggests that the single biggest problem our economy faces is the student loan “bubble”. He said that all the other stuff we are doing to try to fix our economy is like shuffling deck chairs on the Titanic. To fix the problem, he suggests that we limit the amount of student loans that a student is allowed to take out on their own.

Student loans thus could potentially have an effect on real estate in the future. But we also have to remind you that you should use wisdom in allowing information like this to effect any real estate decisions you may be making in the future. Real estate is a limited asset and while student loan debt may cause a shift in the market, real estate is a limited asset and is governed by the basic economic law of supply and demand.

 


KW and Romanski Group Logo

 

Tags: , , ,

Leave a Reply

You must be logged in to post a comment.