The Silent Housing Crisis | Page 10

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