![Federal Student Loan Payments Resume And Could Hurt Housing Market [Photo: Post Bulletin]](https://omdnews.com/wp-content/uploads/2023/08/Post-Bulletin-1.jpeg)
The US student loan payments resume in the coming weeks will deal a significant and lasting blow to the housing market.
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Student Loan Payments Resume Will Have Negative Impact On Homeownership [Photo: CNBC]
US Student Loan Payments Resume
SOURCE– The US student loan payments will be expected to resume these coming weeks and will deal a significant and lasting blow to the housing markets, according to a new survey of real estate professionals. Last week, a home-purchase application fell to the lowest level, and demand may be depressed even harder when the pandemic-era freeze on student debt ends in October.
Almost all of the respondents said that household formation and homeownership rates will be significantly affected for at least one year and predicted a longer-lasting impact. Around 70% of US student loan borrowers were 25 to 49 years of age. When the time comes for Americans to look to set up a new home as they get married and have children the source of demand is likely under pressure as household savings are strained by student loan repayments after almost 4 years of forbearance.
Homeownership is a way for lower-income households to accumulate wealth and is the largest source of wealth for families which is why a reduction could have long-term effects. Most of the respondents said that the resumption of student loan payments will have a negative impact on homeownership that lasts a year or more, some respondents said it would last for at least 3 years.
