{"id":5127,"date":"2024-04-08T22:13:50","date_gmt":"2024-04-08T22:13:50","guid":{"rendered":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/04\/08\/bidens-student-loan-relief-plan-could-slash-millions-in-interest-and-help-and-hurt-first-time-homebuyers\/"},"modified":"2024-04-08T22:13:50","modified_gmt":"2024-04-08T22:13:50","slug":"bidens-student-loan-relief-plan-could-slash-millions-in-interest-and-help-and-hurt-first-time-homebuyers","status":"publish","type":"post","link":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/04\/08\/bidens-student-loan-relief-plan-could-slash-millions-in-interest-and-help-and-hurt-first-time-homebuyers\/","title":{"rendered":"Biden\u2019s Student Loan Relief Plan Could Slash Millions in Interest\u2014and Help (and Hurt) First-Time Homebuyers"},"content":{"rendered":"

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STEFANI REYNOLDS\/AFP via Getty Images<\/p>\n

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President Joe Biden\u00a0<\/strong>on Monday announced his plans<\/a>\u00a0to provide student loan debt<\/a> relief to more than 30 million borrowers.<\/p>\n

At first blush, that appears to be a boon to the housing market. It could help more buyers, particularly first-time buyers, save up extra money for a down payment and closing costs while simultaneously giving them more purchasing power, allowing them to shoulder higher mortgage payments.<\/p>\n

However, critics warn it could also juice housing demand, especially for more affordable starter homes. And with more buyers competing for a very limited supply of homes<\/a> for sale, home prices could rise.<\/p>\n

\u201cPeople could qualify for more house because they have more buying power,\u201d\u00a0says\u00a0Ed Pinto<\/strong>, co-director of the American Enterprise Institute Housing Center. The AEI is a conservative-leaning think tank. \u201cBut because this does nothing for housing supply, the increased buying power will result in higher home prices.\u201d<\/p>\n

In March, the median home list price<\/a> was $424,900, according to the most recent Realtor.com\u00ae data<\/a>. Mortgage rates<\/a> averaged 6.82% for 30-year fixed loans in the week ending April 4, according to Freddie Mac<\/a>.<\/p>\n

Ironically, the cancellation of debt could cause prices for traditionally cheaper starter homes to rise the most. That\u2019s because first-time homebuyers are most likely to be affected the most by student loan forgiveness\u2014and they\u2019re the ones competing for entry-level homes.<\/p>\n

If more first-time buyers can afford to get into the market, the competition for these properties is likely to drive prices up, says Pinto.<\/p>\n

But the student debt relief could help buyers save up for down payments. It would also help them to qualify for larger mortgages as they wouldn\u2019t be putting so much toward their student loan repayments.<\/p>\n

First-time homebuyers are most likely to be affected the most by student loan forgiveness\u2014and they\u2019re the ones competing for entry-level homes.<\/p>\n

Paul Morigi\/Getty Images for We, The 45 Million<\/p>\n

\u201cThe most common complaint we hear from millennials and Generation Z is their frustration around the fact that they cannot afford a house because they are riddled with student loan and other types of debt,\u201d says San Diego-based financial planner Vance Barse<\/strong>, of Your Dedicated Fiduciary. \u201cYet they went to college and did what they were told to do.\u201d<\/p>\n

Under Biden\u2019s plan, the relief would cancel up to $20,000 of accrued interest for borrowers. Plus, interest would be forgiven for borrowers making less than $120,000 a year who are enrolled in income-driven repayment programs. The Biden administration claims it would erase the debt of 4 million borrowers and provide savings of at least $5,000 to more than 10 million borrowers.<\/p>\n

In addition, borrowers who are qualified to have their loans waived under existing programs they have not applied to would see their balances canceled. Those who started paying off their undergraduate loans 20 years ago and those who began paying off their graduate loans 25 years would also have their debt cancelled. That\u2019s in addition to those who attended colleges that have lost their certifications as well as those who are experiencing financial hardships.<\/p>\n

Biden\u2019s plan is aimed at working- and middle-class buyers as well as Black and Latino buyers.<\/p>\n

\u201cRelieving student debt will free up money for people to spend on other priorities, which is likely to include either homebuying or renting,\u201d says Realtor.com Chief Economist Danielle Hale<\/strong>. \u201cIt\u2019s going to put money in their pockets.\u201d<\/span><\/p>\n

However, the student debt forgiveness plan is likely to face opposition and lawsuits<\/a> from Republican lawmakers.<\/p>\n

The president canceled about $146 billion in student debt during his time in office, according to his administration<\/a>. His plan to eradicate even more student debt was blocked by the Supreme Court last year.<\/p>\n

\u201cWe have an affordability crisis in our country when it comes to housing,\u201d says Barse. With student debt relief, \u201cthat many more people may be eligible for homeownership.\u201d<\/p>\n

The post Biden\u2019s Student Loan Relief Plan Could Slash Millions in Interest\u2014and Help (and Hurt) First-Time Homebuyers<\/a> appeared first on Real Estate News & Insights | realtor.com\u00ae<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

STEFANI REYNOLDS\/AFP via Getty Images President Joe Biden\u00a0on Monday announced his plans\u00a0to provide student loan debt relief to more than 30 million borrowers. At first blush, that appears to be a boon to the housing market. It could help more buyers, particularly first-time buyers, save up extra money for a down payment and closing costs…Read More→<\/a><\/p>\n","protected":false},"author":0,"featured_media":5128,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5127","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/5127","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/comments?post=5127"}],"version-history":[{"count":0,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/5127\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media\/5128"}],"wp:attachment":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media?parent=5127"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/categories?post=5127"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/tags?post=5127"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}