Of the many factors holding back young home buyers -- rising prices, tougher lending standards, a persistently unstable job market -- none looms larger than the recent spurt in college debt.
Student debt is a key factor in the weakened market for home-buying activity this spring, according to the National Association of Realtors. A recent study by the group identifies student loans as the top reason many home buyers delayed their purchase and many more did not buy at all. Researchers at the Federal Reserve Bank of New York, meanwhile, report that the amount owed on student loans has tripled in a decade to approach $1.1 trillion, and people in their 20s and 30s -- a key home-buying population -- owe the most.
Traditionally, young homeowners were more likely to have student debt, because college graduates tend to earn more; but the New York Fed says that has changed since 2008.