Florida’s consumer confidence rose for the second month in a row, from 61.1 in July to 65.2 in August. Looking toward the remainder of the year, national consumer confidence and the ability to endure the higher cost of living will be key to economic activity as talks of a recession continue to grow.
The Biden administration’s decision to cancel up to $20,000 in student debt for millions of Americans is likely to offer a short-term boost in spending power. The savings in monthly expenses would reinforce household budgets straining against inflation and rising rents.
Student loans and homeownership are closely tied together, according to the National Association of REALTORS®’ 2021 report on the impact of student loan debt. About 60% of non-homeowning millennials said student loan debt is delaying them from purchasing a home.
“Individuals who were on the cusp of being able to afford a home may see enough of a change to be able to purchase,” said Anderson Business Advisors’ founding partner, Toby Mathis. “For someone who is severely debt-burdened, the $10,000 may not make enough of a difference to allow for home ownership right now but may provide positive momentum to make it a goal that they can achieve in the future.”
Realtor.com’s latest report shows rents have hit a new high; however, the pace of growth is leveling out noticeably. The company’s senior economist, George Ratiu noted constraints such as rising mortgage rates, inflation and a lack of inventory all still exist and would continue to make it hard, especially for younger buyers to buy a house. However, construction of new multifamily buildings is picking up, signaling an improvement in supply down the road and offering weary tenants some hope of a break.
While the loan relief amount is likely to have a “negligible impact” on the home-buying process, it can help future renters with cash flow, noted HousingWire lead analyst, Logan Mohtashami. For more insight on the national economy and inflation, which may be affected by student-loan relief, watch our latest video by GTR’s Consulting Economist Elliot Eisenburg Ph.D.
Greater Tampa REALTORS® understands the importance of having access to personal insurance, business insurance and retirement and banking solutions in this economy. I encourage you to check out Woligo’s expanded benefits for GTR members. These benefits will help support you, your family, your lifestyle and even your team.