The agreement struck to raise the debt ceiling, along with a host of proposals to curb spending, is expected to deal a blow to housing affordability \u2014 especially for student loan borrowers.<\/p>\n\n\n\n
\u201cPeople have used the student debt pause to help pay for their rent and mortgage. They\u2019ve been paying for basic necessities: rent, mortgage, food, health care,\u201d said Natalia Abrams, president of the nonprofit Student Debt Crisis Center (SDCC).<\/p>\n\n\n\n
\u201cI can only imagine that this is going to severely harm the housing market and the rental market,\u201d she added.<\/p>\n\n\n\n
Student loan repayments were originally set to restart 60 days after the Supreme Court decision on Biden\u2019s student debt relief plan or 60 days after June 30 \u2014 whichever came first.<\/p>\n\n\n\n
But as part of the debt limit deal, Democrats agreed that student loan repayments will begin 60 days after June 30 \u2014 without room for a possible extension.<\/p>\n\n\n\n
The measure is one of several concessions Democrats made in exchange for Republican support to raise the debt ceiling and avert a federal default earlier this month.<\/p>\n\n\n\n
Economists say student debt is one of the main barriers preventing younger buyers from purchasing their first home. Without equity built through previous purchases, these buyers are at a disadvantage in an already pricey and competitive market.<\/p>\n\n\n\n
But even if affordability improves later this year, younger buyers might still struggle to compete, said Nadia Evangelou, a senior economist at the National Association of Realtors, in an interview with The Hill.<\/p>\n\n\n\n
This is partly due to the way the market is stacked against potential buyers with less savings and previous home equity.<\/p>\n\n\n\n
\u201cFirst-time home buyers unfortunately cannot compete with existing homeowners because existing homeowners can use this web of gains for a downpayment and they offer cash offers as well,\u201d she said.<\/p>\n\n\n\n