{"id":705,"date":"2023-10-13T17:15:06","date_gmt":"2023-10-13T17:15:06","guid":{"rendered":"https:\/\/connectwithfund.com\/finance\/housing-market-could-hit-another-bump-as-student-loan-payments-resume\/"},"modified":"2023-10-13T17:15:06","modified_gmt":"2023-10-13T17:15:06","slug":"housing-market-could-hit-another-bump-as-student-loan-payments-resume","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=705","title":{"rendered":"Housing market could hit another bump as student loan payments resume"},"content":{"rendered":"
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The U.S. housing market has been over the past year walloped by high mortgage rates and a worsening inventory shortage.<\/p>\n

It may soon face another obstacle: student loan repayments.<\/p>\n

Real estate experts are bracing for a significant blow to the market when the pandemic-era freeze on federal student loan payments comes to an end at the beginning of October.\u00a0<\/p>\n

A recent poll conducted by Pulsenomics found that most economists said homeownership rates will be affected for at least a year by the resumption of student loan payments \u2014 and many predicted the impact could be longer than that.<\/p>\n

HOW HIGH INTEREST RATES ARE ALREADY HITTING AMERICANS<\/u><\/strong><\/p>\n

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For more than three years, federal student loan borrowers have not had to make monthly payments.<\/p>\n

However, the pandemic-era pause is officially coming to an end, setting up a potential financial shock for millions of Americans. Payments will officially come due on Oct. 1, although interest started accruing at the beginning of September.<\/p>\n

STUDENT LOAN INTEREST PAYMENTS AXED UNDER NEW LEGISLATIVE BILL<\/strong><\/p>\n

More than 75% of the survey respondents said that the payments will have a negative effect on homeownership that lasts for a year or more. About 40% predicted an even longer impact of at least three years.<\/p>\n

On top of that, many of the economists believe the resumption of payments could significantly hit the U.S. homeownership rate, and nearly one-quarter expect it would cause an uptick in the delinquency rate.<\/p>\n

About 44 million borrowers in the U.S. were affected by the payment pause, which initially began in March 2020 at the onset of the COVID-19 pandemic. The Biden administration extended the pause for the eighth time<\/u> last November and will not do so again as part of the bipartisan debt ceiling deal approved by Congress.<\/p>\n

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The payments can be substantial. The average monthly bill hovers between $200 and $299 per person, although it is even higher for some borrowers, according to the most recent Federal Reserve data.<\/p>\n

Collectively, borrowers are to resume paying about $10 billion a month, according to an analysis from JPMorgan.<\/p>\n

COMMERCIAL REAL ESTATE MARKET COULD CRASH SOON. HERE\u2019S WHY<\/u><\/strong><\/p>\n

The potential hit comes at an already precarious time for the housing market, thanks to the astronomic rise in mortgage rates over the past year. In fact, housing affordability<\/u> is worse today than during the peak of the 2008 housing bubble.<\/p>\n

The Atlanta Fed’s Housing Affordability Monitor<\/u>, which compares median home prices and other housing costs with median household income, indicates the median U.S. household would have to spend about 43.2% of their income to afford the median-priced house as of June, according to the index. That is the highest share in data dating back to 2006.<\/p>\n

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Even though mortgage rates are hovering near the highest level in decades, home prices have hardly budged. That is largely due to a lack of available homes<\/u> for sale. Sellers who locked in a low mortgage rate before the pandemic began have been reluctant to sell, leaving few options for eager would-be buyers.<\/p>\n

The number of available homes on the market at the end of July was down by more than 9% from the same time last year and down a stunning 46% from the typical amount before the COVID-19 pandemic<\/u> began in early 2020, according to a report from Realtor.com.<\/p>\n

The housing shortage has only served to boost consumer demand, which is keeping prices uncomfortably high and contributing to the least affordable housing market in decades. About 38.6% of the median household income is currently required to make the monthly payment on the average home purchase.<\/p>\n

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“To put today\u2019s affordability levels in perspective, it would take some combination of up to a 28% decline in home prices, a more than 4% reduction in 30-year mortgage rates or up to a 60% growth in median household incomes to bring home affordability back to its 25-year average,” Andy Walden, vice president of enterprise research and strategy at Black Knight, said recently.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The U.S. housing market has been over the past year walloped by high mortgage rates and a worsening inventory shortage. It may soon face another obstacle: student loan repayments. Real estate experts are bracing for a significant blow to the market when the pandemic-era freeze on federal student loan payments comes to an end at the beginning of October.\u00a0 A recent poll conducted by Pulsenomics found that most economists said homeownership rates will be affected for at least a year by the resumption of student loan payments \u2014 and many predicted the impact could be longer than that. HOW HIGH<\/p>\n","protected":false},"author":1,"featured_media":658,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[],"class_list":["post-705","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nHousing market could hit another bump as student loan payments resume | ConnectWithFund<\/title>\n<meta name=\"description\" content=\"The U.S. housing market has been over the past year walloped by high mortgage rates and a worsening inventory shortage. 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