Wednesday, February 3, 2016

House prices finally head everything else

Capital fleeing real estate as investment for renters

Young American? No house for you, except as a rental
the student loan debt problem is a slightly bigger issue than affordable housing. Part of the reason housing is unaffordable is because of the large student loans people are paying off. If you have to pay $500-$1000 a month in student loans, even renting becomes difficult.

  College costs have risen to the stars under the Obama Administration, so the exiting student can now look forward to skyrocketing student loan payments. PhD’s and Master’s level students might qualify for those $100K annual salaries, but they are saddled with at least 1 1/2 years salary in debt (with Fed loans averaging 6 and 7% for the last few years.) Even if they made enough money to qualify for a loan, their student debt makes qualifying for a house in Cali nearly impossible.
They live at home because the reality of their situation demands it. They CAN’T qualify to buy a house, even if they WANT to. Just watch. The next financial crisis will be all those “irresponsible” student loan borrowers. Money at this point goes to paying everyone else and they still can’t afford to exist. Last time I checked, it was called slavery when everyone owned every dime you made and you ended up with zilch!