Student loan debt: another housing market dampener

John Burns Real Estate Consulting indicated that student loan debt will be another stumbling block for the housing market. Faced with mounting student loan debt, poor job prospects and stagnant wages, an increasing amount of 25-to-34-year-olds have moved back in with their parents.

Almost 6 million 25-to-34-year-olds are living with their parents, up 26 percent from when the recession started in 2007. Today's 36.8 percent homeownership rate for 25-to-29-year-olds is at its lowest level since 1999, and homeownership for 30-to-34-year-olds is at its lowest rate in 17 years.

The good news is that this pent-up demand will ultimately provide a much-needed kick-start to the housing sector. The bad news is that the boost will be heavily skewed to the rental market, as it will take longer for this demographic to qualify for a mortgage because of student loan repayments and credit blemishes for unpaid loans.

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