Housing market could hit another bump as student loan payments resume
Redfin CEO Glenn Kelman analyzes the state of the housing market after mortgage rates surged past 7% on 'Cavuto: Coast to Coast.'
The U.S. housing market has been over the past year walloped by high mortgage rates and a worsening inventory shortage.
It may soon face another obstacle: student loan repayments.
Real estate experts are bracing for a significant blow to the market when the pandemic-era freeze on federal student loan payments comes to an end at the beginning of October.
A recent poll conducted by Pulsenomics found that most economists said homeownership rates will be affected for at least a year by the resumption of student loan payments — and many predicted the impact could be longer than that.
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The U.S. housing market has been walloped by high mortgage rates and a worsening inventory shortage over the past year. (David Paul Morris / Bloomberg / File / Getty Images)
For more than three years, federal student loan borrowers have not had to make monthly payments.
However, the pandemic-era pause is officially coming to an end, setting up a potential financial shock for millions of Americans. Payments will officially come due on Oct. 1, although interest started accruing at the beginning of September.
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More than 75% of the survey respondents said that the payments will have a negative effect on homeownership that lasts for a year or more. About 40% predicted an even longer impact of at least three years.
On top of that, many of the economists believe the resumption of payments could significantly hit the U.S. homeownership rate, and nearly one-quarter expect it would cause an uptick in the
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