Apartments all over DC are full of young adults with college degrees, and sometimes, crushing debt. It is no secret that higher education is more expensive than ever, and more than half of graduates start their lives with student loan payments.
In a recent article for The Washington Post, economist Erica Champion noted that though DC has seen a large increase in the population of young people in recent years, significant educational debt may keep them from entering the housing market as early as previous generations.
From the Washington Post:
Even graduates who are diligent managers of their finances will be unlikely to have the savings to buy a home for at least eight years, four years longer than someone graduating in the same year without debt. As a result, the rental apartment market appears to enjoy a deep pool of prospective renters for years to come.
While these young residents are able to afford the ever-rising rents — Trulia found that rents in DC were 3.5 percent greater last month than they were last year, and Delta Associates determined that some neighborhoods in DC have seen rents go up as much as 10.3 percent — the costs associated with buying a home may be prohibitive.
However, young buyers with not much money to their name are finding ways to buy a home by taking advantage of low down-payment loan products, and the statistics evidence this trend. A GAO report from late last year revealed that the FHA’s market share of home purchase mortgages had risen from 4.5 percent in 2006 to 40.2 percent in 2010.
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See other articles related to: apartments
This article originally published at http://dc.urbanturf.com/articles/blog/the_debt_effect_on_the_future_generation_of_homebuyers/5835
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