I read an interesting article this morning by HousingWire's Brena Swanson. It discussed the effect of student loans on our housing recovery. We have known for several years now that just because you have a higher education does not guarantee that you will get a well paying job or any job for that matter. And yet, we all take the risk of acquiring student debt in hopes that it will provide a secure future. I'm not suggesting there is anything wrong with this system. I am a big believer of education and know that it is essential for our future. However, what the article brings to light is our current predicament which doesn't seem to be getting any better.
The unemployment rate is improving, but it's still not enough. And with the amount of student debt the rising generation is acquiring added to our lack of income... it's all many can do to just pay a month to month rent and basic living expenses. And saving money? That is not happening nearly as much as we all would like. Add to that the tightening of underwriting standards and you have a perfect formula to prevent many who would be first time home buyers from entering the market.
The housing market is improving and, while there are several variables that will determine the strength of our recovery in the near future, consumer confidence is rising as well. But we should understand that if something doesn't change in regards to student debt and it's impact on the market the situation will only get worse.