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A more-detailed investigation into comparing student debt and homeownership among young people.  If you don’t have a lot of extra debt, the student-loan payment – which would be like having an extra car payment – wouldn’t prevent you from qualifying.

http://www.nytimes.com/2014/07/06/realestate/college-debt-and-home-buying.html?_r=0

An excerpt:

But Beth Akers, a fellow at the Brookings Institution’s Brown Center on Education Policy, says these findings do not prove a causal relationship. In fact, they could be misleading.

She said she has looked at young-adult homeownership rates over a longer period, and found that the reversal cited by the Fed is “a return to a longstanding trend that existed prior to 2004.” For most of the last 20 years, homeownership rates among young households with student loan debt have been lower, not higher, than rates among households with no debt, she said.

Her research, co-authored with Matthew M. Chingos, a senior fellow at the Brown Center, also disputes the notion that the payment burden is higher on today’s young adults. While the level of education debt has risen over all among young households (ages 20 to 40), the monthly burden of student loan repayment has not increased greatly over the last two decades. From 1988 to 2010, the typical household spent 3 to 4 percent of its monthly income on student loan payments. The monthly burden has remained fairly flat because of offsetting increases in income and longer repayment terms.

Extremely high burdens are still rare. In 2010, about 75 percent of households with people ages 20 to 40 who have education debt owed $20,000 or less, Ms. Akers said. Only 2 percent were carrying more than $100,000.

Perhaps the declining number of young homeowners has more to do with the weak economy and tight lending conditions. Mr. Dyer predicts that mortgage lenders will gradually ease credit standards over the next five years to open up the “buy box” to more young adults.

But what and when they will buy will likely be different from the choices of generations past. “This generation has what some would label a fear of debt,” he said. “They try to be very conscious and pragmatic about what they buy and how much they agree to borrow.”

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