The Washington Times contained an insightful editorial today arguing that the fundamentals of the housing market are bleak despite a more favorable report issue last week by the federal sponsored housing agency, Freddie Mac. Of significant interest to us is the papers linkage of college debt to long-term trouble for housing:
There is another, deeper problem with the housing market: ballooning student debt. Young people are graduating from college (or not - graduation rates for four-year colleges are shockingly low) with non-dischargeable debt that is the size of a mortgage. The grand total of student loan debt has reached about $1 trillion. It is pretty hard for young families to buy a house while loaded down with such massive obligation, even if they are lucky enough to be gainfully employed. Locking out the buyers at the entry level of the market makes recovery of the entire housing market that much harder.
The less obvious point here is that anyone who depends economically on the housing industry for wages or business profits should favor aggressive higher education reform that reduces tuition costs and debt levels.