Showing posts with label az houses. Show all posts
Showing posts with label az houses. Show all posts

Tuesday, April 21, 2015

Price Jumps Are Leading to More House Flips

More investors are flipping properties again, a trend that started last year and is building momentum across the country, according to Auction.com's First Quarter 2015 Real Estate Investor Activity Report.
Investors lately are showing more interest in purchasing a home to flip than renting it out. In fact there was a 6.5 percent quarter-over-quarter increase in favor of flipping in the first quarter of 2015.
"It seems clear that the unusually low inventory of homes for sale has led to higher home prices, which makes it challenging for investors to rent homes out at a rate that’s profitable, and still affordable for tenants," says Rick Sharga, Auction.com's executive vice president. "So in states like California, Washington, Nevada, and Arizona a large number of investors have decided that the best opportunity today is to meet the demand of prospective home owners by buying, fixing, and re-selling investment properties."
Survey respondents indicated a preference toward flipping over a rent-to-hold strategy in every state Auction.com conducts live auction events. The West and Midwest had the largest margins of investors favoring flipping over renting. The five states that had some of the largest numbers of investors in favor of flipping over renting were Nevada, California, Washington, Idaho, and North Carolina.
However, the preference depends on investor profile, Auction.com’s survey found. Survey respondents who said they were making a one-time purchase still tended to prefer a hold-to-rent strategy. On the other hand, survey respondents who identified themselves as full-time “real estate investors” and those who work on behalf of another investor showed a preference toward flipping.
Source: Auction.com


Tuesday, February 24, 2015

The Hottest Winter Home Markets

While most of the United States is currently under a deep freeze, real estate markets in many cities across the country are heating up, according to the recent Hotness Index compiled by realtor.com®.
Not surprisingly, warm locations continue to be hot spots for winter buyers. Miami, Las Vegas, Phoenix, Raleigh, and San Diego rank highest on the Hotness Index, and see busy Spring level home-buying activity earlier than other cities across the country.
To compile the Hotness Index rankings, economists fromrealtor.com® looked at 2014 monthly search volume on realtor.com®, adjusted for population, and combined climate data from the National Oceanic and Atmospheric Administration.
“The correlation between warmer metropolitan areas and more January searches makes sense, as it’s easier to get out and go house hunting in these cities,” said Jonathan Smoke, Chief Economist forrealtor.com®. “In these markets, looking for a home in November or January makes as much sense as August.
Winter home-buying activity isn't just booming in cities with balmy climates. Chicago is a surprisingly hot real estate market in the winter months, according to the Hottest Index. Despite Chicago's frigid temperatures, their prime buying season actually begins in January and home showings during snowstorms are the norm.
Some suggest that what's driving this push towards an earlier Spring buying season is the lack of inventory in many metropolitan areas.
“Prices are appreciating and homes are selling more quickly,” Smoke said. “These are the criteria that we use to define a healthy market. When inventory is growing as well, the hot market can keep its momentum, which benefits both sellers and buyers.”

Monday, February 16, 2015

Successful Cities Invest in Technology, Energy

Smart investments in energy and innovation earn San Francisco, CA and Austin, TX the distiction of being named the Best-Performing Cities in America by the Milken Institute.
Dynamic Cities
The Milken Insitute ranked 379 metro areas to help businesses, investors, government officials, and public-policy groups track and evaluate the performance of metros where they do business relative to the rest of the country. In the 2014 index, the they weighed nine factors, including  job, wage, and technology trends, with a heavy emphasis on growth in jobs creation and retention and the overall quality of new jobs.
What made these cities better equipped to weather the recent economic downturn was their ability to "offset high costs, an unfavorable tax structure, and a burdensome regulatory environment thanks to the clustering of talent and technology in an entrepreneurial ecosystem. The two main factors driving the success of these metros is technology and shale energy production.
"Technological advances in horizontal drilling and hydraulic fracturing are altering the energy landscape of the United States," according to the study. "Few experts had anticipated the magnitude of the boom in shale oil and gas exploration and production occurring since 2007. Energy investment has claimed the largest share of GDP since the early 1980s."
Study Highlights
  • San Franciso, CA, earned the top spot among large metros, accounting for 45 percent of all jobs created over the five years ending in 2013.
  • Five Texas metro areas were ranked in the top 10 list of best-performing cites, due to a combination of tech, energy strength, and a favorable business climate.
  • California and Colorado each had four metro areas in the Top 25.
  • Technology centers, made up of creative and scientific-based industries represented 13 of the Top 25.
  • Seven metros made the Top 25 due to large gains in shale oil and gas exploration, associated infrastructure investment, and related activities.
  • Fargo, ND, was No. 1 among small metros, benefitting from the shale oil boom and a diverse makeup of industries.
  • West Palm Beach, FL, increased 93 spots and was the city with the overall biggest increase.
Sources: "America's Best Performing Cities Are Invested In Technology And Energy,"  Fast Company (Jan 15, 2015), and "Best Performing Cities," Milken Institute, (Janaury, 2015)


Friday, January 23, 2015

Existing-Home Sales Rebound: 5 Stats to Know

Home sales picked up at the end of 2014, closing off a year that had a sluggish start but then showed encouraging signs in the second half, according to the National Association of REALTORS®’ latest housing report, released Friday.
Existing-home sales rose 2.4 percent in December month-over-month, bouncing back after a dismal November. Total home sales –reflecting completed transactions of single-family homes, townhomes, condos, and co-ops – reached a seasonally adjusted annual rate of 5.04 million in December.
“Home sales improved over the summer once inventory increased, prices moderated, and economic growth accelerated,” says Lawrence Yun, NAR’s chief economist. “Sales were measurably better in the second half – up 8 percent compared to the first six months of the year.”
Overall for 2014, the median national existing-home price was $208,500, reaching the highest level since 2007, and a 5.8 percent increase from 2013 when it was $197,100. However, total existing-home sales were 3.1 percent lower in 2014 compared to 2013, NAR reports.
Here’s a closer look at five housing stats from NAR’s latest report -- reflecting December 2014 data -- to gauge the market:
1. Home sales: Single-family home sales rose 3.5 percent in December to a seasonally adjusted annual rate of 4.47 million compared to 4.32 million in November. Single-family home sales are 4 percent above the pace a year ago. Existing condo and co-op sales, on the other hand, dropped 5 percent in December.
2. Home prices: The median existing-home price for all housing types in December was $209,500 – 6 percent higher than year ago levels. This marks the 34th consecutive month of year-over-year price gains.
3. Days on the market: Properties typically stayed on the market in December for 66 days, a slightly shorter time frame than a year ago when the average was 72 days. Short sales were on the market the longest amount of time at a median of 98 days in December, while foreclosures sold in 61 days. Non-distressed homes averaged 66 days on the market. About 31 percent of homes that were sold in December were on the market for less than a month, according to NAR.
4. Distressed sales: Foreclosures and short sales edged up slightly in December, reaching 11 percent of sales compared to 9 percent in November. However, distressed sales are down from 14 percent a year ago. Of December existing-home sales, 8 percent were foreclosures and 3 percent were short sales. On average, foreclosures sold for a discount of 15 percent below market value while short sales were discounted 12 percent.
5. Inventory: Total housing inventory at the end of December fell 11.1 percent to 1.85 million existing homes available for sale. That represents a 4.4-month supply at the current sales pace, which is down from 5.1 months in November. Unsold inventory is now 0.5 percent lower than a year ago.
“A drop in housing supply in December raises some affordability concerns in the months ahead as minimal selection and the potential for faster price appreciation could offset the demand from buyers encouraged by a stronger economy and sub-4 percent interest rates,” says Yun. “Housing costs – both rents and home prices – continue to outpace wages and are burdensome for potential buyers trying to save for a downpayment while looking for available homes in their price range.”
By Region
The following is a look at how existing-home sales performed across the country in December:
  • Northeast: existing-home sales fell 2.9 percent to an annual rate of 660,000. Sales are 3.1 percent above year ago levels. Median price: $246,600, up 3.2 percent above a year ago.
  • Midwest: existing-home sales dropped 3.5 percent to an annual level of 1.09 million in December. Sales are 2.7 percent below December 2013. Median price: $159,100, up 5.3 percent from a year ago.
  • South: existing-home sales in the South climbed 3.8 percent to an annual rate of 2.17 million in December. Sales are 7.4 percent above December 2013. Median price: $184,100, up 6.6 percent from a year ago.
  • West: existing-home sales surged 9.8 percent to an annual rate of 1.12 million in December. Sales are 2.8 percent above a year ago. Median price: $299,600, up 5.6 percent year-over-year.


Tuesday, January 20, 2015

More Home Owners Are Remodeling Again

A housing index that measures activity in the remodeling market reached a record-high in the final quarter of 2014, showing that home owners are once again sprucing up their homes following a large slowdown in remodeling activity in the years following the Great Recession.
Biggest Remodeling Payoffs:
The National Association of Home Builders’ Remodeling Market Index rose to 60 in the fourth quarter of 2014. Any reading above 50 indicates more remodelers are reporting higher market activity than those who say they are experiencing less activity.
“The recent pace and volume of business has been a boon to our remodeler members' confidence in the recovery of the housing market," says NAHB Remodelers Chair Paul Sullivan. "The upward trajectory of the RMI results over the past year has shown that home owners are ready, willing, and deciding to remodel."
All of the subcomponents measured within the index posted increases, including large additions, small remodels, and maintenance and repair.
"Even with some weakness in existing homes sales and house prices earlier in the year, remodelers are upbeat as 2014 closes," says NAHB Chief Economist David Crowe. "The consistent improvement in RMI results throughout 2014 are a sign of the gradual recovery of the remodeling market."


Monday, December 1, 2014

Mortgage Lending Plunges to 13-Year Low

Mortgage lending is running at its lowest level in more than a decade, and 2014 is on pace to be the weakest for new mortgages since 2000, according to newly released figures by the Federal Reserve Bank of New York.
Will Lenders Ease Up?
Most of the drops in mortgage lending this year have been attributed to a sharp decrease in refinancing. The New York Fed’s data does not separate mortgage lending for home purchases from those for refinancing.
Mortgage lending has averaged $357 billion per quarter for the past year ending in September, which marks the lowest amount since the middle of 2001, the Fed reports. If the fourth quarter doesn’t show a spike in lending activity–which historically it does not—2014 will go down as the worst year for mortgage volume since 2000.
The drop in lending comes at a time when mortgage rates are hovering near historic lows. Freddie Mac reported that the 30-year fixed-rate mortgage averaged 3.97 percent last week. The rate drop in recent months has been welcome news for buyers and home owners who have been able to take advantage, particularly after the increase last year. The 30-year fixed-rate mortgages jumped in the middle of last year from around 3.6 percent to 4.6 percent in June, before falling back down in recent months.
Source: “New Mortgage Lending Drops to 13-Year Low,” The Wall Street Journal (Nov. 25, 2014)


Thursday, November 6, 2014

Purchase Applications Post First Rise in Weeks

Applications for home purchases, a leading indicator of home sales, increased 2.6 percent last week, even with a rise in interest rates, according to the Mortgage Bankers Association’s seasonally adjust index of mortgage activity, reflecting the week ending Oct. 31. The rise follows a 5 percent decrease the previous week. 
Refinance activity is diminishing. Refinancing posted a big surge last month due to interest rates hitting the lowest point of the year. But for the last two weeks, refinance activity has fallen, dropping 5.5 percent the prior week.
Due to the big drop in refinancing applications last week, overall mortgage application activity, which reflects both refinancing and home purchases, posted a 2.6 percent decrease in the week.
Meanwhile, the 30-year fixed-rate mortgage was on the rise last week, up four basis points, averaging 4.17 percent.
Source: “U.S. Mortgage Applications Fall in Latest Week: MBA,” Reuters (Nov. 5, 2014)


Tuesday, October 21, 2014

Markets Still Plagued by Inventory Crunch



The number of homes for sale is still low in many markets: Supply nationwide in September was at five and a half months; most economists consider a normal level to be six to seven months. The supply of new homes was even lower, at nearly five months, according to realtor.com®'s September National Housing Trend Report.
Inventories Show Signs of Improvements
"To truly relieve the inventory shortage on a sustained basis, new-home construction needs to rise by at least 50 percent from the current levels," says Lawrence Yun, chief economist for the National Association of REALTORS®. 
The following markets have posted some of the biggest drops in listings year-over-year:
  • Las Vegas: -37.9%
  • San Jose, Calif.: -36.2%
  • Columbus, Ohio: -29%
  • Cincinnati: -26.5%
  • Houston: -25.2%
  • Washington, D.C.: -25%
  • San Francisco: -23.4%
  • Chicago: -22.8%
Meanwhile, in some markets, home buyers have found more choices in the past year. These markets have seen the biggest growth in inventory levels year-over-year:
  • Honolulu: +27.5%
  • Orlando, Fla.: +25.8%
  • Miami: +22%
  • Charleston, W.Va.: +20.1%
Nationwide, the median age of inventory fell slightly year-over-year in September due to the reduced number of homes on the market, according to realtor.com®. Homes spent about 90 days on the market in September, three days less than a year ago.
Also, median listing prices held steady for the fourth consecutive month, maintaining a 7.7 percent gain year-over-year. The median list price in September was $214,900 nationwide.


Tuesday, October 14, 2014

Why Low Rates Aren't Enough for Buyers

Federal Reserve Chair Janet Yellen and housing forecaster Robert Shiller said earlier this year that they expected low rates to serve as a stimulus to home buying this year.
Freddie Mac reported the 30-year fixed-rate mortgage dropped to 4.12 percent for the week ending Oct. 9, near the lowest average rate of the year. The rate is far less than a 20-year mean of more than 6 percent for the 30-year fixed-rate mortgage. Yet mortgage rates hovering near annual lows for the past few weeks have not spurred the market. What's going on?
From low down payment options for first-time buyers to jumbo loan options for move-up purchases, find out what lenders are offering buyers today.
However, home sales are facing major challenges that even low borrowing costs can’t help. The Wall Street Journal explains that 2014 home sales “have been hit by poor weather, a low number of homes available for sale, and tight credit.” Also, the most popular home sales season—typically the spring and summer—has already come to an end.
“Families buying houses need to be done with that by the time that school starts,” says Guy Cecala, publisher of Inside Mortgage Finance. “Rates have been hovering around 4 percent for the better part of the peak home-buying season. I don’t think anybody has been sitting on the sidelines, waiting for rates to drop.”
Second, high credit standards in the wake of the financial crisis are still preventing many would-be buyers from getting a loan and taking advantage of the low rates.
“Right now the real issue isn’t the price of credit, it’s more the availability,” says Robert Denk, an economist with the National Association of Home Builders. Eighty three percent of homebuilders recently surveyed by NAHB say they have lost sales over the last six months due to buyers not qualifying for a mortgage. Tight credit has resulted in about 18,700 new-home sales lost, NAHB estimates. 
Source: “Housing Needs More Than Mortgage Rates of 4%-ish to Boom,” The Wall Street Journal (Oct. 9, 2014)


Friday, October 10, 2014

Home Owners are Tapping Into Equity, Again



Home equity lines of credit surged nearly 20 percent compared to a year ago and are now at the highest level since the 12 months ending in June 2009, according to RealtyTrac’s Home Equity Line of Credit (HELOC) Trends Report. HELOC originations comprised 15.4 percent of all loan originations nationwide during the first eight months of the year, the highest percentage since 2008.
Here's why HELOCs are back on the rise: Nearly 1 Million Homes Regain Equity
“This recent rise in HELOC originations indicates that an increasing number of home owners are gaining confidence in the strength of the housing recovery and, more importantly, have regained much of their home equity lost during the housing crisis,” says Daren Blomquist, vice president at RealtyTrac.
Nearly 10 million home owners nationwide, representing 19 percent of all home owners with a mortgage, have regained at least 50 percent equity in their homes, RealtyTrac data shows. Meanwhile the percentage of home owners with severe negative equity has fallen from 29 percent in the second quarter of 2012 to 17 percent in the second quarter of this year, Blomquist notes.
Despite home equity lines of credit rising significantly in the past year, they still remain 76 percent below the 2006 peak reached during the housing boom, RealtyTrac notes.
Among the nation’s largest metro areas tracked, 49 out of 50 posted year-over-year increases in HELOC originations for the year ending June 2014 (the lone exception was Rochester, N.Y.).
The following metro areas had the largest year-over-year increases in HELOC originations:
  • Riverside-San Bernardino, Calif.: +87.7%
  • Las Vegas: 85.1%
  • Cincinnati: 81%
  • Sacramento, Calif.: 65.1%
  • Phoenix: 60.1%
Source: RealtyTrac


Tuesday, October 7, 2014

Luxury Buyers Are Spending Mega Bucks in These Markets

The high-end residential real estate market remains strong point and plays a big role in the housing recovery. Nearly half – 48 percent – of all wealthy consumers recently reported that they plan to purchase a luxury home within the next 12 months, according to a survey of consumers with a net worth of at least $5 million conducted by Coldwell Banker Previews International program and the Luxury Institute. For affluent individuals under the age of 35, the percentage of those planning to buy a luxury home in the next year jumps to whopping 81 percent. This group of affluent Millennials also reported the highest average purchase price of all age groups at $7.8 million, according to the survey. 
Inside the Luxury Market
So where are luxury buyers’ targeting their home search? Coldwell Banker’s survey identified the following 10 U.S. cities as having the highest number of luxury home sales valued at $1 million or more during the last 12 months through June 2014:
  1. San Francisco: 2,485 (the number of home sales valued at $1 million-plus)
  2. Los Angeles: 2,170
  3. New York: 2,145
  4. San Jose, Calif.: 1,119
  5. Houston: 981
  6. Chicago: 972
  7. Naples, Fla.: 964
  8. Miami: 933
  9. San Diego: 927
  10. Washington, D.C.: 878
In the $10 million-plus sales category, New York, with 58 home sales valued at $10 million-plus and Beverly Hills, Calif., with 28 home sales of $10 million-plus led the pack.
What Are Luxury Buyers Looking For?
Location is no longer the top search criteria among luxury buyers, particularly the younger generations, according to the survey. With the ability to work remotely becoming an option for a growing number of people, only 25 percent of the under-35 age group indicate that location dominates their home search criteria. The under-35 group factors in lifestyle considerations instead, with 75 percent saying that dictates their choice of which home to buy, according to the survey.
The demand for eco-friendly homes is growing, too. Nearly one-third of all wealthy buyers under the age of 45 surveyed said a “green” or “LEED certified” home was more important to them than it was just three years ago. Twenty-one percent of all wealthy buyers say they want to purchase an eco-friendly home, a significant jump up from 7 percent in 2013.
Twenty-five percent of luxury home buyers also view a fully automated, high-tech home as a greater priority. For 37 percent of respondents under the age of 35 and 30 percent of those with a net worth of more than $10 million, safe rooms were also found to be a top priority.


Monday, October 6, 2014

Buyers Grow Resistant to Higher Home Prices

Buyers are pushing back against higher home prices, according to the latest Credit Suisse monthly survey of real estate professionals. Overall, agents in 37 of the 40 markets surveyed in September reported lower-than-expected buyer traffic, up from 31 markets in August.
Too Much, Too Fast?
Some housing analysts are concerned that the sudden rise in home prices could make homes more unaffordableagain if the price increases outpace income growth.
“Many buyers have shifted from a negotiation mindset toward a willingness to sit on the sidelines and wait for lower prices,” according to the survey.  “The resistance of buyers to higher home prices was broad-based with comments from agents suggesting that affordability and the future trajectory of home prices was a particularly large part of conversations with buyers.”
The median price of existing-homes has risen by 25 percent in the past five years to $219,800 in August. The median price of new homes has increased even more, up 33 percent, to $275,600 during that time period.
Real estate professionals in several of the largest housing markets are complaining about lackluster growth heading into the fall. For example, the Credit Suisse report showed that in Phoenix, Ariz., many real estate professionals report that housing demand is being challenged by sluggish job growth. They say many sellers have over-priced their homes and are unwilling to negotiate. In Atlanta, real estate professionals blamed dropping buyer traffic on the lack of quality inventory.
“To purchase a house you have to have confidence in the future and the buyers are very uncertain about the future,” the Atlanta agents surveyed said in the report.
Even in Dallas, where the housing market is strong and more buyer traffic has been reported since the spring, real estate professionals say low inventories are hampering growth. Dallas real estate professionals are “relying on new builds much of the time but even that inventory remains low,” according to the survey.
In Houston, another strong market, agents reported that relocation activity has slowed in September, but the market there is returning to normal levels after more than three years of price increases and high home sales.
Source: “Here’s how the top 5 Housing Markets Look for Fall Homebuying,” HousingWire (Oct. 3, 2014) and “Home Prices Sapped Home-Buyer Traffic in September,” iMarketReports.com (Oct. 3, 2014)


Thursday, September 18, 2014

Get a Discount on Your Mortgage

Lending giants Bank of America Corp. and Citigroup reportedly will offer mortgages at discounted rates to stir more lending among low-income borrowers and those with subprime credit histories. The loans will be originated through a program by the Neighborhood Assistance Corp. of America, a national nonprofit group that primarily assists low- to moderate-income borrowers.
Credit Standards Easing
Under the new program, the discounts, which will be offered on fixed-rate mortgages, will be greater than what banks usually reserve for borrowers with high credit scores, significant assets, and large down payments. To get the discount in the new loan program, the borrowers will have to pay mortgage points, which are upfront fees that lower the interest rate on a mortgage.
For example, if borrowers pay a mortgage point — which is equal to 1 percent of the total loan amount taken — they typically receive a discount of 0.25 percent on the mortgage interest rate. However, under the new loan assistance program, the banks will offer a 0.5 percent discount for a single mortgage point.
NACA, the originator of loans under the program, doesn't require borrowers to have down payments or to pay closing costs. It also approves borrowers for mortgages as soon as 12 months after a default on a loan. NACA conducts in-depth reviews of applicants' payment histories and requires income and asset documentation, according to CEO Bruce Marks.
The banks' move to work with NACA follows on the heels of a $16.65 billion settlement reached by Bank of America with government regulators in August, as well as a $7 billion settlement Citigroup reached in July. The settlements were reached following accusations that the banks sold risky mortgage securities during the run-up to the housing crisis. Neither bank admits to wrongdoing. But the settlements do require that the banks assist struggling home owners, such as lending to low-income borrowers.
The banks, however, say that their decision to issue NACA loans isn't related to the settlements.
Source: “Citigroup and Bank of America Offer Mortgages with Discounted Rates,” The Wall Street Journal (Sept. 16, 2014)


Tuesday, September 16, 2014

What Makes a City Smart?

Everyone wants to live in a smart place. But the magic mix that draws people in is composed of a lot of different dynamics coming together all at once, according to the National Geographic Channel’s Smart Cities program.
“A city needs a heart and soul—typically the center, where people congregate for work and leisure. Smart cities are well-connected locally and internationally, have a sustainable lifestyle, and are places where people come first,” says Ian MacFarlane, consultant for the program.
National Geographic’s Traveler magazine recently compiled a list of the 50 top attributes that make for a smart city, naming cities that exemplify each factor along the way. Of course, the authors were thinking of travel destinations when they put the list together, but many items on their list matched attributes that make for a top place to live, too. Here are a few that resonated with the U.S. real estate industry:
  • Support for local artisans. Example: Paducah, Ky. was recently named a UNESCO City of Crafts and Folk Art for its promotion of its fiber arts assets and its attempts to attract creative types to its LowerTown Arts District.
  • Dreamers who foster innovation. Example: San Francisco is a city that has more than its fair share of tech start-ups and their eager investors.
  • Urban farming. Example: Manhattan was ahead of the curve when Bell Book & Candle started growing greens in aeroponic rooftop gardens many years ago.
  • High-tech data streams. Example: Chattanooga, Tenn. got the nickname of “Gig City” for its lightning-fast Internet.
The magazine included 47 other examples from around the world of how cities are demonstrating the types of intelligence that delight travelers and residents alike in the upcoming issue.
Source: “The 2014 Traveler 50: World's Smartest Cities,” National Geographic’s Traveler magazine (October 2014 issue).


Wednesday, September 3, 2014

Student Debt Burden Holding First-Time Buyers Back

Carrying student loan debt is making it more difficult for many young professionals to qualify for a mortgage. Recent college graduates with student loan debt who want to own a home will need to earn about one-third more annually — or $8,969 more — than those who are debt-free, according to new research by the real estate data firm RealtyTrac.
The Student Loan Debt Crisis
“To overcome the additional debt from student loans, indebted college graduates need to make more income than college graduates without student loans to be able to afford a home,” says Daren Blomquist, a vice president at RealtyTrac. For its analysis, RealtyTrac factored in the median home price for each state and county and calculated the minimum amount of income needed to qualify for a loan to purchase a home at that price.
RealtyTrac found that graduates with student loans who are earning the median U.S. household income can afford to make the monthly payments on a median-priced home in 96 percent of the 494 county markets it analyzed.
But many graduates with student loans are saddled with high debts and are struggling to break ahead.
The average graduate in 2014 carried $33,000 in debt, an amount that has tripled over the last 20 years, according to Edvisors.com, a network of websites about planning and paying for college. The average starting salary for an employee holding a bachelor’s degree is around $45,000.
“The average student loan debt varies from state to state, and somewhat counterintuitively, some of the most expensive states for housing also have the lowest average student loan debt,” Blomquist says. For example, while California has one of the lowest levels of student loan debt, it boasts some of the highest home prices in the nation.
In some cases, college grads with student loan debts are having to earn a lot more money than their debt-free counterparts if they want to buy a home. According to RealtyTrac’s analysis, the following states are where recent graduates with student loans need to make even more income to match the purchasing power of students without loans:
  • Connecticut: 58%
  • Rhode Island: 56%
  • Michigan: 55%
  • Ohio: 52%
  • Pennsylvania: 49%
Student loan debt is a pressing hurdle for graduates not only in purchasing a home but also in building wealth over the long term. For example, households headed by young, college-educated adult without any student debt have about seven times the typical net worth ($64,700) than households headed by young, college-educated adults with student debt ($8,700), according to data from the Pew Research Center. About a quarter of households headed by an adult under 40 has student debt, a record high, according to Pew.
Source: “College Grads Face High Hurdles to Buying First Homes,” MarketWatch/The Wall Street Journal (Aug. 28, 2014)