KIRO Radio's Tom Kelly digs deep into the Puget Sound real estate market
Real Estate

Rising student debt delaying first-time purchase

Between 2004 and 2012, student loan balances nearly tripled, according to a new survey from the Federal Reserve Bank of New York.

What's more, one-third of student loan borrowers are delinquent on their debt, according to the Federal Reserve report. This will impact their credit rating and possibly keep them out of the mortgage market much longer.

"Short term, you see a decrease in the number of first-time homebuyers," Brian Coester of Coester Valuation Management told CNBC. "You're going to see somebody who would have been able to afford a more expensive house maybe go for the lower version or the downgraded version."

Potential buyers with heavy student debt burden have been forced to rent or even move back in with their parents as they chip away at their debt.

"Long term, it's going to really affect especially the upper end, because people aren't going to have the excess income to buy the jumbo property or buy that high end property," says Coester. "It' s going to affect home prices as a negative, as more of a cap, because it's really debt that they are servicing."

Top Stories

  • Joining the LOB
    It's never easy being the new guy, but Tharold Simon is already making his mark

  • Smartphone Safety
    Our phones entertain us, inform us and now might protect us

  • Pumpkin Assault
    Pumpkin-flavored items are coming to store shelves whether it's fall or not
ATTENTION COMMENTERS: We've changed our comments, but want to keep you in the conversation.
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.
comments powered by Disqus
Listen to the show
Hear Real Estate Today on KIRO Radio
Join Tom Kelly every Sunday at 9am on KIRO Radio to talk Puget Sound real estate.

Sign up for breaking news e-mail alerts from MyNorthwest.com
In the community
Do you know an exceptional citizen who has impacted and inspired others?
KIRO Radio and WSECU would like to recognize six oustanding citizens this year. Nominate them to be recognized and to receive a $2,000 charitable grant.