College Debt Drains $92,000 From Homebuyers’ Pockets
By Suzanne De Vita
College debt is hindering homebuyers, draining more than $92,000 from a potential purchase, according to recently released research from Zillow.
In the average scenario, an aspiring buyer with college debt has $388 in monthly payments, according to Zillow. Assuming the buyer observes the “30 percent” standard—that is, not exceeding 30 percent of their income on housing and their loans—he or she can afford a home priced up to $269,400. Approximately half (52.3 percent) of listings on the market now are in that range.
By comparison, a buyer without college debt can spend up to $361,800, which broadens the pool significantly: 66.4 percent of listings. The difference is a staggering $92,400.
With the bite out of the budget, buyers have less options—a challenge compounded by already low inventory in the starter tier, where many are looking to purchase.