{"id":54322,"date":"2023-08-29T07:49:46","date_gmt":"2023-08-29T11:49:46","guid":{"rendered":"https:\/\/ifintechworld.com\/loans\/us-housing-market-faces-new-hurdle-student-loan-repayments\/"},"modified":"2023-08-29T07:49:50","modified_gmt":"2023-08-29T11:49:50","slug":"us-housing-market-faces-new-hurdle-student-loan-repayments","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=54322","title":{"rendered":"US housing market faces new hurdle: Student loan repayments"},"content":{"rendered":"
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The U.S. housing market has been over the past year walloped by high mortgage rates and a worsening inventory shortage.<\/p>\n

It may soon face another obstacle: Student loan repayments.<\/p>\n

Real estate experts are bracing for a significant blow to the market when the pandemic-era freeze on federal student loan payments comes to an end this fall, according to a recent poll conducted by Pulsenomics.<\/p>\n

Most survey respondents said homeownership rates will be affected for at least a year by the resumption of student loan payments \u2013 and many predicted the impact could be longer than that.<\/p>\n

STUDENT LOAN PAYMENTS SET TO RESUME NEXT WEEK: WHAT BORROWERS NEED TO KNOW<\/strong><\/p>\n

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For more than three years, federal student loan borrowers have not had to make monthly payments.<\/p>\n

But that pandemic-era pause is coming to an end this fall, setting up a potential financial shock for millions of Americans. Although payments will not come due until October, interest will start accruing at the start of September.<\/p>\n

STUDENT LOAN INTEREST PAYMENTS AXED UNDER NEW LEGISLATIVE BILL<\/strong><\/p>\n

More than 75% of the survey respondents said that the payments will have a negative effect on homeownership that lasts for a year or more. About 40% predicted an even longer impact of at least three years.<\/p>\n

About 44 million borrowers in the U.S. were affected by the payment pause, which initially began in March 2020 at the onset of the COVID-19 pandemic. The Biden administration extended the pause for the eighth time<\/u> last November but will not do so again as part of the bipartisan debt ceiling deal approved by Congress.<\/p>\n

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The payments can be substantial. The average monthly bill hovers between $200 and $299 per person, although it is even higher for some borrowers, according to the most recent Federal Reserve data.<\/p>\n

Collectively, borrowers are to resume paying about $10 billion a month, according to an analysis from JPMorgan.<\/p>\n

COMMERCIAL REAL ESTATE MARKET COULD CRASH SOON. HERE\u2019S WHY<\/u><\/strong><\/p>\n

The potential hit to the housing market comes at an already precarious time amid the astronomic rise in mortgage rates over the past year as well as limited resale availability.<\/p>\n

Even though mortgage rates are nearly double what they were three years ago, home prices have hardly budged. That is largely due to a lack of available homes<\/u> for sale. Sellers who locked in a low mortgage rate before the pandemic began have been reluctant to sell, leaving few options for eager would-be buyers.<\/p>\n

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The number of available homes on the market at the end of July was down by more than 9% from the same time last year and down a stunning 46% from the typical amount before the COVID-19 pandemic<\/u> began in early 2020, according to a recent report from Realtor.com.<\/p>\n

The housing shortage has only served to boost consumer demand, which is keeping prices uncomfortably high and contributing to the least affordable housing market in decades. In fact, about 38.6% of the median household income is currently required to make the monthly payment on the average home purchase.<\/p>\n

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“To put today\u2019s affordability levels in perspective, it would take some combination of up to a 28% decline in home prices, a more than 4% reduction in 30-year mortgage rates or up to a 60% growth in median household incomes to bring home affordability back to its 25-year average,” Andy Walden, vice president of enterprise research and strategy at Black Knight, said recently.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The U.S. housing market has been over the past year walloped by high mortgage rates and a worsening inventory shortage. It may soon face another obstacle: Student loan repayments. Real estate experts are bracing for a significant blow to the market when the pandemic-era freeze on federal student loan payments comes to an end this […]<\/p>\n","protected":false},"author":1,"featured_media":54323,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[240],"tags":[83],"class_list":["post-54322","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loans","tag-featured"],"yoast_head":"\nUS housing market faces new hurdle: Student loan repayments | iFintechWorld<\/title>\n<meta name=\"description\" content=\"The U.S. housing market has been over the past year walloped by high mortgage rates and a worsening inventory shortage. 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