Here are some statistics to think about.
- The average graduate of the class of 2015 has $35,000 in student loan debt.
- Since 2010, 40% of households under 35 had a student loan.
- The average American household with at least one credit card has nearly $15,950 in credit-card debt (in 2012), according to CreditCards.com, and the average interest rate runs in the mid- to high teens at any given time.
When a lender looks at debt, they see it all the same. A $260/month student loan payment is looked at in the same light as credit card debt or a car payment. If someone has all three debts, getting a mortgage can be a very difficult task.
Because of this increase in debt, for the first time ever, young people who did not seek a college education are more likely to buy homes than their college educated peers.
This is bad news for all homeowners looking to sell a home. If there are less young people who are looking to buy small and inexpensive homes, it will be harder for those trying to sell to move up. The ripple effect continues as those selling medium priced houses will have less potential buyers because they are stuck in their entry-level homes.
The twist? According to NAR, 88% of Millennials home purchases have been for houses over $100,000. And 45% of Millennials pay over $250,000 for their first home.