The $83 Billion Threat to the Housing Market

The link between high levels of student loan debt and a moribund housing recovery has been the subject of discussion for some time, as a dearth of first-time homebuyers push homeownership rates down to the lowest level in almost 20 years .

Now, John Burns Real Estate Consulting has alerted its clientele to a dismal reality: Student debt will cost the housing industry approximately $83 billion in sales in 2014. With college debt increasing by about 6% every year, there is every reason to believe this trend will continue, and probably worsen.

The number-crunching involved in the analysis puts some real heft behind the argument that student debt is holding housing back. The report estimates that heavy college debt will reduce real estate sales by 8% for this year, and that households that pay $750 or more for college loan debt each month are priced out of the housing market entirely.

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