What's the Latest Development?

The amount of student loans shouldered by the nation's young adults is keeping them from buying their first home, which has traditionally been a bedrock of an upward trending US economy. "Researchers for the One Wisconsin Institute found that the rate of homeownership among individuals who are paying off student loans is 36% lower than among their peers who have no student debt. The disparity can be seen at all income levels." Among individuals who earn $50,000 to $75,000 a year, those who are still paying down student loans have a 28% lower rate of homeownership compared with others in the same income group.

What's the Big Idea?

The financing problem extends beyond the generation of first-time home buyers and could possibly affect the housing market as a whole. "If predominantly young, first-time purchasers are not entering the homeownership pipeline at anywhere near their traditional rate, at some point the system begins to choke. Owners of modest-priced starter homes find it more difficult to sell and move up. They in turn can't buy the larger homes they crave, reducing demand for houses in the more expensive categories. A shortage of first-time buyers at the intake level eventually triggers problems all the way up."

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Read it at the LA Times