(RestoreAmericanGlory.com) – On Monday, President Joe Biden issued a new student loan forgiveness plan which could potentially heavily impact first-time homebuyers while also increasing housing market prices.
Realtor.com put out a new report in which it was noted that the relief plan was going to be increasing economic accessibility through student loan debt cancellation. It added that this reduction in debt could increase the purchasing power of more than 30 million Americans while also enhancing the purchasing power of many homeowners through the reduction of their student loan debts.
Experts have argued that the increase in buyer strength could potentially lead to greater competition for affordable homes, and could lead to price spikes because of the stagnant supply of available housing options.
The report also found that it was possible that people could end up qualifying for more houses because they have further buying power. However, it was noted that this does not mean there will be an increase in the supply of houses. As such home prices could potentially increase.
Currently, the median home list price is around $424,900 while mortgage rates are at around 6.82 percent. Many Americans have already been finding it challenging to enter the housing market. The introduction of more capable buyers to the market could lead to a further increase in prices, which could impact home affordability, particularly in the lower price brackets. These are the homes that are most often targeted by first-time homebuyers.
The report has also suggested that while student loan relief could be helpful to some individuals, it would overall make homeownership less accessible for the majority of Americans.
Copyright 2024, RestoreAmericanGlory.com
