The Consumer
Financial Protection
Bureau reports that
student loan debt is
approaching $1.2
trillion, an all-time
high and the second
highest form of
consumer debt
behind mortgages.
to its lowest point in nearly three decades,
according to a survey by the National
Association of Realtors.16 New regulatory
requirements, such as the “qualified mortgage” (QM) rule that imposes a maximum
43 percent debt-to-income limit for a loan to
achieve favorable QM status, will likely act
as a deterrent to would-be homeowners carrying these sizable student loan burdens.17
Perhaps the strongest homeownership
headwind of all is the accumulated impact
of more than a decade of household income
stagnation and decline. In 2013, the U.S.
median household income was $51,939, 8
percent lower than the median income of
$56,436 in 2007 (on the eve of the Great
Recession) and 8.7 percent lower than the
median household income peak of $56,895
that occurred in 1999.18 As Chart B demonstrates, for households of all racial groups,
real median income in inflation-adjusted
dollars has fallen from the peak levels that
occurred prior to the 2001 recession: In
2013, household income was 5.6 percent
lower for whites (falling from $61,733 in
1999 to $58,270), 13.8 percent lower for African-Americans (falling from $40,131 in 2000
to $34,598), 11.1 percent lower for Asians
(falling from $75,423 in 2000 to $67,065),
and 8.7 percent lower for Hispanics (falling
from $44,867 in 2000 to $40,963).19
In addition, since the late 1990s, household
incomes at just about every income level from the 10th percentile right on up to the
95th - have either stagnated or declined.20
Most problematic for the homeownership
market, the Great Recession has profoundly
impacted the household incomes of those