Rising housing costs are putting a major squeeze on Americans.
Nearly 39 million households can’t afford their housing, according to the annual State of the Nation’s Housing Report from Harvard’s Joint Center for Housing Studies.
Experts generally advise budgeting about 30% of monthly income for rent or mortgage costs. But millions of Americans are far exceeding that guideline.
One-third of households in 2015 were ‘cost burdened,’ meaning they spend 30% or more of their incomes to cover housing costs. Of that group, nearly 19 million are paying more than 50% of their income to cover their housing needs.
When so much of your paycheck is going toward keeping a roof over your head, it forces sacrifices in other budget areas, including food, health care and transportation.
LDSAgents.com note—What this article does not say is that many people finance homes using income generated by both partners working. Not only does this put stress on a family, but if one wage earner suddenly cannot work for some reason, finances can get stretched very quickly. We advise our readers to consider the advice of LDS leaders and be watchful about taking on too much debt.
Student debt is exploding, burdening some 40 million borrowers with an often crippling obligation that can take decades to pay off.
“The reality of student debt is honestly just now starting to sink in. We see the percentage of home ownership by the age of 30 dropping from 33 percent to 23 percent among individuals with student debt,” said Daniel Haitz of the college planning website eduSquared. “That’s a startling trend that has only occurred in the last 10 years. What’s crazier is that student debt in America grew at 7 percent last year and isn’t showing signs of stopping.”
From 2008 to 2014, student loan debt surged by 84 percent, according to a study by Experian. The $1.2 trillion in student debt now surpasses home equity loans and lines of credit, credit card and automotive debt.
“Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.” J. Reuben Clark (in Conference Report, Apr. 1938, 103)
For those considering financial aid, there are ways to tame student debt. Some of the best solutions are the most simple.
Student debt can adversely affect getting your first loan.
At LDSAgents.com we frequently encounter young clients who cannot qualify for a home loan due to high student debt.
“As students graduate with more debt than ever, those with student loans are getting worse credit scores and taking out fewer mortgages. At the same time home ownership rates among younger Americans sink to historic lows. College students who took out loans will graduate this year with an average of $33,000 in student debt, Read more →