Where have all the buyers gone? Gone to college (almost) every one.

By
Industry Observer
https://activerain.com/droplet/4p9B

One reason that first time home buying rates are down is allegedly that there are so many younger people strapped with the obligation to repay student loans.  The president seems to be aware of the situation, and he is taking action to appear as if he is reducing their load.

Just as their parents have been blindsided by the fact that refinancing a home loan for a pile of cash comes with interest charges and monthly payments, the youngan's are shocked to learn that they also must pay back the "free" funding they applied for and received to finance their tuition.  Too bad that they didn't remember fourth grade when they were taught that loans create an obligation to be paid back, and there is a carrying charge called interest. 

Here's the injustice:  The parents walked away from their houses and became renters.  They did this after halting their monthly mortgage payments for a year or so and living for free, and their rent payment is lower than the mortgage payments they were supposed to have made.  Parents get to keep the boat and RV and BMW they got with the cash-out refi money, just not the house.  On the other hand, the kids are finding that they can't shed the responsibility of their student loans without dying, which is generally felt to be an unpleasant experience. 

I agree with the president who says that post-secondary education is not a privilege, but a right.  Where we differ is that the president seems to think that the right comes with no responsibility.  Yes, Dexter, your college loan has to be paid back, and if it means that you have to live with Mom & Dad in their shiny new rental, that's what it means.

 

Posted by

 Mike Carlier  Lakeville, MN

 

612-916-3033

 

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Rainmaker
3,978,939
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I am opposed to much of what the President has come up with.

I have 4 relatives that went to college.  3 of the 4 had huge debt when they got done.  The one that did not is the only one that worked during time off of school.  Also, that same one is the one that did NOT use borrowed money to go on trips like Spring Break.

We continue to allow people not to be in charge of their own destiny but slacking off.

Jun 10, 2014 08:45 AM #1
Rainmaker
925,699
Ron Marshall
Marshall Enterprises - Saint Michael, MN
Birdhouse Builder Extraordinaire

I am somewhat in agreement with Bill.  And, of course, you.  But, no kid of mine is living with me in a rental...ever.  And, thank goodness, I don't have kids, or a boat or an RV!  They are all expensive!

Jun 14, 2014 02:29 AM #2
Rainmaker
637,761
Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

It's tough to buy  a car let alone a huge investment in a house when you have student loans totaling 20-30,000, if you are lucky.  And, then get a job at McDonald's when you get done with your BS or BA!

Aug 14, 2014 08:37 AM #3
Rainmaker
522,122
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Poor planning is always tough.  A real estate investor has a fair idea of probable return and a way to pay down the debt.  Education investors are not exempt.  College grads working at McDonald's either included that in their plan, or they had no plan and still probably haven't a clue. 

Aug 18, 2014 11:15 PM #4
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Rainmaker
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Mike Carlier

More opinions than you want to hear about.
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