Real estate
BY SHAHERYAR KHAN
Buyers face challenges as loans resume
The breakdown
Poll: Have student loans affected your decision to buy a house?
Losey said student loans make it harder for households to save for buying a home. Data from the Texas Real Estate Research Center shows stu- dent loan debt nearly doubles the time it takes to save for a 5% down payment on a $217,000 home, for example, from 1 1/2 years to three years. According to a 2021 survey from the National Association of Realtors, 60% of millennials who do not own a home reported delays of at least three years in purchasing a home due to student loans.
Yes
No/don't know/don't wish to buy a house
Gen. X (Born 1965-1980)
Baby boomers (Born 1946-1964)
Millennials (Born 1981-1996)
Student loan payments resumed Oct. 1 after a three-year forbearance. As such, local real estate experts said first-time homebuyers in the Houston area are facing challenges alongside rising home prices and interest rates as well as limited housing inventory. Student loan payments were paused in response to the COVID-19 pandemic starting in March 2020. On average, Texans owe $26,273 each in student loan debt, according to Clare Losey, assistant research economist at the Texas Real Estate Research Center at Texas A&M University.
60%
53%
37%
SOURCE: NATIONAL ASSOCIATION OF REALTORS/COMMUNITY IMPACT
What experts say
Houston median home sales price
Cathy Trevino, chair of the Houston Association of Realtors, said resuming loan payments, rising home prices and limited inventory are causing a “trifecta of obstacles” for aspiring homeowners. However, Steven Craig, professor of economics and associate dean of faculty and research at the University of Houston, said he believes student loan payments resuming did not directly reduce housing demand, as borrowers were aware of their financial commitments.
+25.66%
$343,950
$333,000
$300,000
$265,000
Annual household income
10.9%
$30K
Sept. 2020
Sept. 2021
Sept. 2022
Sept. 2023
Numbers are based on the average monthly student loan payment of $273 in Texas.
8.2%
$40K $50K $60K $70K $80K $90K $100K
6.6% 5.5% 4.7%
SOURCE: HOUSTON ASSOCIATION OF REALTORS/COMMUNITY IMPACT NOTE: SEPTEMBER DATA IS THE MOST RECENT MONTHLY DATA AVAILABLE.
4.1% 3.6% 3.3%
Looking ahead
Tricia Turner, a Houston-based Realtor and owner of Tricia Turner Properties, said she recommends prospective homebuyers
renegotiate student loan payment plans for lower monthly payments and consider a 40- year mortgage to lower payments.
0%
Percent of monthly income spent on student loan payment
100%
SOURCE: CLARE LOSEY, TEXAS REAL ESTATE RESEARCH CENTER AT TEXAS A&M UNIVERSITY/COMMUNITY IMPACT
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