Where are the First-Time Home Buyers?
Living With Their Parents, Unemployed, & in Debt
Hey Chel you know it’s kinda funny
Texas always seems so big
But you know you’re in the largest state in the Union
When you’re anchored down in Anchorage
–Michelle Shocked; lyrics, “Anchored Down in Anchorage”
Is there a connection between staggering student loans — non-dischargeable in bankruptcy, thanks to big bank lobbying — and weak housing demand amongst first-time buyers?
At least one other Realtor (besides me) thinks so:
Predatory banks will happily lend tend of thousands of dollars to 18-year-old kids because they know those kids will have to pay it back — even if it takes their whole lives. In the name of making college affordable, we’ve saddled an entire generation of young adults with insane amounts of debt. And, of course, college has only become exponentially more expensive because of these policies. This is absolutely disgusting and outrageous. If bankruptcy courts could discharge the debt, then banks wouldn’t make the loans in the first place. Demand drops, and the price of a college education falls with it. I include this in my ways to fix housing because the twenty-somethings are going to need to be buying homes soon and these unnecessary debts are standing in the way.
–Greg Fielding, Bay Area Real Estate Trends
Once upon a time, filing for bankruptcy was a way for Americans — when all else failed — to “wipe the slate clean” and get a fresh start.
Then, banks successfully lobbied to make various debts (credit cards, student loans) more difficult or impossible to discharge in bankruptcy.
The solution?
Go back to the way it was before.
P.S.: What’s the the effect of toiling to pay off life-long debts?
