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49 » VISIT US ONLINE @ DSNEWS.COM STUDENT LOANS "NOT NECESSARILY A DEAL BREAKER" According to many reports, student loan debt is a significant hurdle for millennials when buying a home. But new numbers from the First American Economic Center contradicts those findings, showing that student loan debt is more likely to delay the timing of homeownership, but it's not necessarily a deal breaker. To examine the impact of student loan debt on house-buying power, the report looked into the median household income of a prospective first-time home buyer, who is, by definition, a renter. "Renter's house-buying power is based on the prevailing 30-year, fixed mortgage rate (4.64 percent in January), and assumes a 5 percent down payment and that one-third of pre-tax income is used for the mortgage," the report reads. e average student loan debt for those that complete their bachelor's degree is approximately $30,000. Based on a 6 percent Federal direct student loan interest rate, the average monthly payment is just above $300 per month, or nearly $4,000 per year. e report pointed out that this reduces median household income for those that complete their bachelor's degree and, therefore, reduces house-buying power by $23,000 to $323,603. While the reduction in house-buying power is not ideal, renter house-buying power for those with a bachelor's degree is still more than $120,000 greater than renters with just a high school education. So, how does higher house-buying power influence home buying? Quoting the latest available household census data in 2017, First American stated that homeownership rates for those with a bachelor's degree are nearly 8 percent higher than those with a high school degree. is difference becomes more exaggerated when comparing those with a college degree to those who do not complete high school—nearly a 25 percent difference in homeownership rates. In short, education pays off when it comes to home buying power. Nine out of 10 millennials say their college education was worthwhile and have already paid off their debt or will in the future. Student-debt adds up, but higher education leads to higher income wherein the increase in income attributable to higher education far outweighs the impact of student loan debt. Although the price of college is high, in the endgame not going to college may cost more. WHAT DRIVES HOME SEARCHES It would make sense that home searches surge according to the weather but conventional wisdom is not always right, or at least not so black and white. According to Trulia's recent data, as the temperature dips and prospective buyers in the nation's coldest areas hunker down for the winter, a spike in searches where the weather is warmer and sunny can be expected. e report indicated that while most of us assume that retirees make up the bulk of seasonal searches, there are younger home searchers who may be attracted just as much by hot job markets as they are by warmer weather are looking to leave colder climates too. e data shows us that in reality, seasons don't seem to have a large impact on our cold-to-hot search behaviors. In general, metros with the coldest winters do see bigger seasonal bumps—the deeper the freeze, the larger the bump in seasonal cold-hot searches. e percentage-point gap between August and December cold-hot searches is almost four times wider in places, where the average December temperature is 5 degrees Fahrenheit or below than it is among metros where the average temperature is "only" between 23 and 32 degrees Fahrenheit. According to the report, among cold- to-warm searches, 62.6 percent end up in a metro with an older median age than the source metro. At the same time, 71.2 percent of all cold-to-warm search activity ends up in a metro with higher employment growth. It also found that there is some overlap between the two destinations, potentially the best of both worlds for both groups of potential warm-climate seekers. ese metros are "hot" with both an older population and stronger employment growth pulling in 45.6 percent of all search activity. For example, from August 2018 to December 2018, Green Bay, Wisconsin had the majority of all non-local search activity going specifically to warm metros in the south increasing from 14.4 percent to 18.3 percent. Of those searches directed at warmer areas, the jump in interest in Tampa, Fla. was particularly strong, going from 14 percent of warmer searches to 25.1 percent.