Housing Market Loses $83 Billion A Year Due to Increased Student Debt

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Today’s News Synopsis:

John Burns Real Estate Consulting confirmed reports by HousingWire that student debt and the housing recovery are correlated in that the housing market is losing $83 billion a year due to higher student debt.  Mortgage applications saw an increase this past week by 3.8% according to the latest Mortgage Bankers Association Applications Survey.  Consumer optimism over the housing market is continuing to show signs of increase.


In The News:

Mortgage Bankers Association“Mortgage Applications Increase in Latest MBA Weekly Survey” (10-8-14)

“Mortgage applications increased 3.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 3, 2014.”

Bloomberg“Tightest Credit Market in 16 Years Rejects Bernanke’s Bid” (10-8-14)

“Lenders are continuing to tighten the credit vise on homebuyers after five straight years of economic expansion, imposing the toughest standards since at least 1998, according to a new index by CoreLogic (CLGX) Inc.”

Housing Wire“Student debt costs housing $83B a year” (10-8-14)

“For more than a year HousingWire has been reporting on the link between high levels of student loan debt and the struggling housing recovery.  Now John Burns Real Estate Consulting has quantified the true measure of this dismal reality: Student debt will cost the housing industry approximately $83 billion in sales in 2014.”

Mortgage Professional America“The unlevel playing field: Mortgage originators versus banks” (10-8-14)

“It’s not news that much of the blame for the housing crisis has been directed at mortgage originators.  However, almost eight years later in a much improved housing climate, the group is still paying for the financial meltdown and shoddy lending practices.”

OC Housing News “Is SoCal housing overvalued or merely as expensive as usual” (10-8-14)

“What is the best measure of value in a housing market? The two most commonly accepted measures are price-to-rent and price-to-income, but both have a similar weakness: they don’t consider the impact of fluctuations in mortgage interest rates.”

Bloomberg“What Central Bankers Want Is to Be Boring, Hampl Says: Economy” (10-8-14)

“Some central bankers have had enough of living in the limelight.  As policy makers, academics and investors debate whether the world economy can return to its pre-crisis shape, the community of central bankers is yearning to ditch unconventional tools and return to the standard monetary routine, even if they are unable to do so for now, Czech National Bank Deputy Governor Mojmir Hampl said.”

Mortgage Professional America – “Consumers more optimistic about housing” (10-8-14)

“Americans are getting more optimistic about the housing market after a recent dip in sentiment, according to new data from Fannie Mae. The jump in optimism, along with positive employment data, spurred hopes for a modest housing recovery in 2015.”


On Friday, October 24, Bruce Norris will be presenting the 7th annual I Survived Real Estate 2014.

Bruce Norris of The Norris Group will be presenting Secrets to Becoming Wealthy with SJREI in Sunnyvale on Thursday, November 6.

Bruce Norris of The Norris Group will be holding his Property Buying Boot Camp Tuesday-Thursday, November 11-13.


Looking Back:

The California housing market was expected to continue to improve into the coming year with the pending increase in home prices and sales.  Three top banks, Morgan Stanley, Bank of America, and Wells Fargo were expected to see an increase in earnings and lead the top six U.S. lenders.  With the recent government shutdown and hesitation about the debt ceiling, more and more investors were more cautious.


For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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