Dive Brief:
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Recent graduates can still afford to buy homes in 96% of U.S. markets, even if they have student loans to pay off.
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The evidence contradicts speculation that student debt prevents young, potential home buyers from purchasing their first houses. Still, notes RealtyTrac Vice President Daren Blomquist, debt-saddled recent grads need to earn 34% more—$8,969, to be exact—than those who don’t have student loan payments to make.
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It’s harder for young buyers with student loan debt to qualify for mortgages in Michigan, Ohio, Pennsylvania, Iowa, and Alabama than in other states, the report shows. In New York, Virginia, Massachusetts and Wyoming, student loan debt has the least impact on how much income a buyer needs for a median-priced home.
Dive Insight:
Even for new graduates with median incomes and without student debt, housing prices are too steep in 12 U.S. counties, mostly in New York and California. The news comes at a time when young people are choosing to rent more than ever before, a signal that— within the millennial generation, at least— interest in being a homeowner may be waning.