“The rising student loan debt problem is another consequence of the housing downturn,” says NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “As more and more parents face tighter budget restraints as a result of lower home values, this is forcing an increasing number of students to take out loans for tuition, essentially shifting some of the burden of paying for college from parents to students.”
The link between rising student loan debt and the start of the housing crisis comes on the heels of a recent report from the Federal Reserve showing that U.S. household wealth plunged nearly 40 percent from 2007 to 2010 as a result of declining home values. “Together, these findings should serve as an urgent wake-up call for policymakers to do their part to ensure a full-fledged housing recovery moves forward to restore the balance sheets of tens of millions of home owning families, create jobs and spur economic growth,” says Rutenberg.
To get housing back on track and provide the foundation for a long-lasting economic recovery, Rutenberg called on leaders in Washington to provide access to mortgage credit for qualified borrowers, demonstrate their support for the mortgage interest deduction, support affordable downpayments for home buyers, enact reforms in appraisal practices and oversight to ensure that appraisals accurately reflect true market values, and establish a strong housing finance system that retains a federal backstop to ensure that standard 30-year fixed-rate loans and adjustable rate mortgages remain readily available for working class households.
“Young Americans need to have the ability to pay for college in order to prepare for the jobs of the future,” says Rutenberg. “Homeownership has historically generated a thriving middle class by creating wealth and helping families to cover higher education costs. Hard-working American families and the economy will continue to struggle until we get housing back on track.”