Thursday, February 16, 2012

High Student Loan Debt Hinders Home Buying

With recent college graduates carrying an average debt load of more $25,000, fewer are able to qualify for a mortgage on their first home despite record-low interest rates.

A Federal Reserve study shows that the tighter lending criteria that emerged following the recession are taking a toll on younger, first-time home buyers, many of whom have below-average credit scores and fewer economic resources to make a large down payment.

The Fed's white paper to Congress notes that only 9 percent of 29- to 34-year-olds got a first-time mortgage between 2009 and 2011 versus 17 percent a decade earlier.

Source: "Student Loans Near $1 Trillion Hurting Young Buyers: Mortgages," Business Week (02/12)

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